Interim report
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ASA International Group Interim Financial Report For the period from 1 January to 30 June 2025 ASA International Group plc
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ASA INTERNATIONAL GROUP PLC CONTENTS PAGE GENERAL INFORMATION 3 REPORT OF THE DIRECTORS 4-22 INDEPENDENT REVIEW REPORT 23-24 INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 26 INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 27 INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 28 NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 29-65 25 INTERIM CONDENSED CONSOLIDATED INCOME STATEMENT AND STATEMENT OF OTHER COMPREHENSIVE INCOME ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 2
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ASA INTERNATIONAL GROUP PLC GENERAL INFORMATION DIRECTORS: APPOINTED ON: RESIGNED ON: Guy Dawson 15 May 2018 Dirk Brouwer 15 May 2018 Johanna Kemna 28 June 2018 Dr. Salehuddin Ahmed 08 December 2020 19 June 2025 Chris Low 01 February 2023 05 June 2025 Rob Keijsers 01 November 2024 Sheila M'Mbijjewe 17 December 2024 John Khabbaz 23 April 2025 REGISTRATION: ASA International Group plc is a company registered in England and Wales. Registered number: 11361159 COMPANY SECRETARY: Prism Cosec Limited Highdown House, Yeoman Way Worthing, West Sussex, BN99 3HH United Kingdom REGISTERED OFFICE: Highdown House, Yeoman Way Worthing, West Sussex, BN99 3HH United Kingdom OFFICE ADDRESSES: ASA Tower, 12th Floor 23/3, Bir Uttam A.N.M. Nuruzzaman Sarak, Shyamoli, Dhaka-1207, Bangladesh Tel: +880 2 8119828, 8110934-35 Rembrandt Tower, 35th floor, Amstelplein 1 1096 HA Amsterdam, The Netherlands Tel: +31 20 846 3554 WEBSITE: www.asa-international.com EMAIL ADDRESS: Jonathan Berger Head of Investor Relations ir@asa-international.com AUDITOR: Ernst & Young LLP 25 Churchill Place Canary Wharf, London E14 5EY United Kingdom Chris Low resigned as Non-Executive Chairman and as a Director, with effect from 05 June 2025. Guy Dawson, who previously served as Non-Executive Chairman, has resumed this role. Rob Keijsers has been appointed as Group Chief Executive Officer (‘CEO’) effective from 01 April 2025 having previously been appointed as Interim CEO and member of the Board as an Executive Director since 01 November 2024. John Khabbaz joined the Board as an Independent Non-Executive Director on 23 April 2025. Dr. Salehuddin Ahmed resigned from the Board with effect from 19 June 2025. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 3
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ASA INTERNATIONAL GROUP PLC REPORT OF THE DIRECTORS ____________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 4 ASA International Group plc (LSE: ASAI) , one of the world’s largest international microfinance institutions, is pleased to announce its unaudited interim results for the six month period ended 30 June 2025. Highlights • Strong loan portfolio growth – Gross Outstanding Loan Portfolio rose 37% YoY to USD 540.9m, driven by Ghana (+USD 59m in Q2 alone), supported by Pakistan, Tanzania, Uganda, and Myanmar • Profitability surge – Reported net profit almost doubled to USD 26.8m (H1 2024: USD 13.5m). Underlying net profit of USD 24.2m , which excludes the impact of hyperinflation accounting, was up 73% (H1 2024: USD 14.0m). Return on average equity increased to 46%. This means that there is no longer material uncertainty in relation to the going concern in the interim financial report • Resilient portfolio quality – Group PAR>30 improved to 2.0% (H1 2024: 2.2%), with Ghana, Uganda, Kenya and Myanmar all below 0.5% • Strengthened equity base – Total equity up 41% to USD 136.2m, supported by profit growth and a USD 15.5m FX translation gain (vs. USD -4.3m in FY 2024). This contributed to total comprehensive income growing to USD 43.5m in H1 2025 compared to USD 4.1m in H1 2024 (FY 2024: USD 22.1m) • Stable funding position – Total funding rose to USD 597.3m, supported by deposit growth and stable debt sourcing. A robust USD 229m funding pipeline is in place for H2 2025 to support future growth • Continued capital returns – Interim dividend declared of USD 0.048 per share (+60% YoY) on underlying net profit, maintaining the 20% payout ratio in H1 2024 Rob Keijsers, ASA International Chief Executive Officer, said: “ASA International’s outstanding performance in the first half of 2025 is a testament to the investment we have made in strengthening management, the dedication of our teams and the trust and resilience of our clients across our operating markets. Our strong operational growth, reflected by the significant increase in OLP and sustained improvements in portfolio quality, demonstrates our ability to deli ver meaningful financial services to underserved female entrepreneurs. This has naturally translated into significantly improved profitability which has meant we can continue to make capital returns to our shareholders. “An important milestone during the first half of the year was the launch of an innovative and groundbreaking partnership to offer microinsurance to our clients across Africa. Following a successful soft launch of ‘ASA LifeCare’ in Uganda in May, the product has now officially launched in Uganda, Kenya and Nigeria with plans to expand across all of ASA International’s African markets. The partnership embeds Enhanced Credit Life into ASA International’s loan products, providing affordable protection for clients from just USD 0.30 per month, covering credit, life, and health -related risks. We expect that will bolster client retention and generate additional non-interest income. This product brings added value and protection to our clients as we seek to deepen and broaden financial inclusion. “Continuing the work undertaken throughout 2024, a core strategic focus for the Board has been on continuing to strengthen our leadership team. Both the Executive Committee at the Group -level and local leadership in Sri Lanka, Pakistan and Nigeria have been further reinforced. The positive impact they are already providing has been extremely encouraging in the form of fresh perspectives alongside significant professional, banking and leadership experience. “We have also taken the important step of formally joining the Client Protection Pathway (CPP Pathway), a global initiative that helps financial institutions like ours demonstrate and continuously improve how we protect clients. This builds on what we already do every day and reinforces that client protection is at the heart of the ASA Model. “Looking forward to the remainder of 2025, we expect to see the existing trend of growing demand for loans continue. We will also see ever greater productivity across the organisation as we drive efficiency in the branch network and therefore reduce our cost -income ratio. The next stage of our digital transformation effort is imminent as we roll-out the core banking system and digital platform to Ghana and Tanzania. We remain confident that our expanded reach and strengthen ed leadership will deliver increased financial inclusion for the communities we serve and sustainable growth for all stakeholders.”
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ASA INTERNATIONAL GROUP PLC REPORT OF THE DIRECTORS ____________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 5 Key performance indicators (Unaudited - USDm unless otherwise stated) H1 2025 H1 2024 Change (CC) Change Net profit(1) 26.8 13.5 51% 99% Underlying net profit(2) 24.2 14.0 27% 73% PAR>30 days(3) 2.0% 2.2% - (0.2ppt) Number of clients (m) 2.6 2.4 - 9% Number of branches 2,232 2,091 - 7% Profit before tax(1) 47.8 28.3 37% 68% OLP(4) 527.4 384.6 25% 37% Gross OLP(4) 540.9 394.9 25% 37% Outlook Building on the sustained momentum seen during H1, the outlook for the remainder of 2025 remains positive with improved business and financial performance expected with continued robust demand expected. Accordingly, the e xpectation is that both underlying and reported net profit for 202 5 is to significantly exceed the current company compiled consensus for FY 2025 of USD 37.5m (as of the date of this announcement) . For H2 2025, t he IMF no longer c lassifies Ghana and Sierra Leone as hyperinflationary, while Nigeria and Myanmar are on the watchlist. In addition, the Group continues to monitor FX and geopolitical risks. CHIEF EXECUTIVE OFFICER’S H1 2025 REVIEW Introduction ASA International saw strong operational growth throughout H1 2025 as demand for our products from clients remained robust. Total number of clients reached 2.6 m and Gross OLP increased by 18% compared to the year end 2024 with Ghana, Pakistan, Tanzania, Myanmar, Uganda, Kenya, and Nigeria being the main drivers for this growth. Our proven, low risk model ensured that this loan growth was not achieved at the expense of portfolio quality, with PAR>30 remaining low at 2.0% for the whole company at the end of the June 2025. We also saw Gross OLP per Client grow to USD 210 during the period as we seek to meet more of our clients’ working capital needs . Efficiency also increased with Clients per Loan Officer increasing to 273 in H1 2025 from 265 in H1 2024. This operational performance also translated into significantly improved profitability with net profit almost doubling versus H1 2024 (H1 2025: USD 26.8m; H1 2024: USD 13.5m). This strong profitability enabled ASA International to continue making capital returns to shareholders in the form of an interim dividend. From an operational footprint standpoint and in line with our strategy, the number of branches increased to 2,232 as at 30 June 2025 from 2,091 as at 30 June 2024, which reflects the opening of 140 net new branches across the various operating countries. Client numbers grew by 9% compared to H1 2024 as demand for loans increased in most markets. Gross OLP grew to USD 540.9m at the end of June 2025 from USD 458.6m at the end of December 2024. This 18% growth was driven primarily by Ghana, where Gross OLP rose by USD 59m during Q2 2025 alone, reflecting both strong underlying portfolio expansion and also benefiting from a 32% appreciation of the Ghanaian cedi. Additional notable contributions came from Pakistan, Tanzania, Uganda and Myanmar. This growth in Gross OLP was not made at the expense of portfolio quality with this improving in most markets. PAR>30 days improved to 2.0% as at 30 June 2025 compared to 2.2% in 30 December 2024.
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ASA INTERNATIONAL GROUP PLC REPORT OF THE DIRECTORS ____________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 6 Regional footprint ASA International continues to operate across four main regions comprising 13 countries: • East Africa comprises operations in five countries: Tanzania, Kenya, Uganda, Rwanda and Zambia • West Africa comprises operations in three countries: Ghana, Nigeria, and Sierra Leone • South East Asia comprises operations in two countries: The Philippines and Myanmar • South Asia comprises operations in three countries: Pakistan, India and Sri Lanka East Africa East Africa’s operational result improved with Gross OLP increasing 8% to USD 1 61.3m as at 30 Jun e 2025 from USD 148.9m as at 31 December 2024, and the number of branches increasing by 5 6 (YoY) to 612. This operational improvement translated into a significant growth in the region’s financial performance in H1 2025, with net profit increasing by 37% to USD 9.1m from USD 6.6m. All operating countries in East Africa contributed positively to the region’s operational and financial results, in particular, Tanzania and Kenya and increasingly Uganda. West Africa West Africa’s financial and operational results materially improved in H1 2025, compared to H1 2024, with net profit more than doubling to USD 17.2m from USD 6.2m. Gross OLP significantly increased to USD 151.8m as at 30 June 2025 from USD 86.2m as at 31 December 2024, and PAR>30 significantly improved from 1.5% to 0.9% driven by the excellent portfolio quality in Ghana and a significant improvement of PAR>30 in Nigeria. Sierra Leone did experience increased PAR levels given lower collection efficiency. The strong operational and financial performance in the region was underpinned by Ghana which benefited from underlying growth combined with an appreciating currency. Both Nigeria and Sierra Leone made positive contributions following some more difficult recent periods. South East Asia South East Asia’s net profit increased to USD 2.7m in H1 2025 from USD 2.3m in H1 2024 primarily supported by strong financial performance in Myanmar despite a challenging environment with the ongoing internal conflict and the impact of the earthquake that struck at the start of the year . As the loan demand continued to grow, the region’s Gross OLP increased by 10% from USD 86.2m as at 3 1 December 2024 to USD 96.8m as at 30 June 2025, and PAR>30 improved to 6.3% to 6.8%. The number of branches increased by 7% from 489 to 524, resulting in an increased client reach of 480k, up by 2%. South Asia South Asia delivered stronger financial performance in H1 2025, with net profit increasing by 1 44% to USD 3.3m from USD 1.4m in H1 2024, supported by improved portfolio quality in Pakistan and Sri Lanka, which helped reduce the regional PAR>30 to 1.6% as at 30 Jun e 2025 from 2.1% as at 31 Dec ember 2024. The branch network also expanded during the year, with number of branches increase by 40 new branches to reach 625, with Pakistan and Sri Lanka together contributing 57k new clients. However, the region’s Gross OLP declined slightly by 4% to USD 131.0m as at 30 June 2025 from USD 135.9m as at 31 December 2024, mainly due to the intentional shrinking of the operations in India as the Group works to deconsolidate the business . This also affected the region’s client growth trends with total clients decreasing by 7k to 847k.
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ASA INTERNATIONAL GROUP PLC REPORT OF THE DIRECTORS ____________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 7 Leadership Continuing the work undertaken throughout 2024, a core strategic focus for the Board has been on continuing to strengthen our leadership team. In June 2025, Steven van Zuylen was promoted to Chief Technology Officer and joined the Executive Committee. In 2025, ASA International also welcomed Sivan Maron as Chief Human Resources Officer and a member of the Executive Committee. We were also delighted to welcome onboard new local CEOs for Sri Lanka and Pakistan in 2025 as well as CFOs in Nigeria and Sri Lank a. Furthermore, a number of other senior managers have been appointed across our operating countries, further strengthening the local finance teams. Digital strategy and transformation The digital strategy is focused on the implementation of a Core Banking System and a digital financial services platform that meet the requirements for running a modern micro banking institution. Alongside the digitalisation of the client journey, the inte ntion is to also further enhance business administration processes which will drive efficiency and productivity gains. The next stage of the digital transformation programme involves the roll-out of the Temenos Core Banking System and digital financial services app in Ghana and Tanzania and this is targeted to go-live later this year. Once this has been completed, nearly 50% of our clients will have been transferred to this new platform. Competitive environment The competitive landscape remains broadly unchanged with the strongest competition being faced in India, The Philippines , Nigeria, Tanzania, and Uganda. In most other markets, competition from traditional microfinance institutions is less intense, particular ly in Myanmar. Competition from pure digital lenders has not had a meaningful impact thus far. Sustainability In the first half of 2025, we advanced our sustainability agenda by installing 71 solar systems, purchasing 28 electric motorbikes, planting 10,000 trees, training more than 60,000 stakeholders in environmental awareness, and removing over 100 kilos of plastic from the streets. Over the same period , 80,000 community members benefitted from initiatives in health, education, environment, and disaster relief, including health camps, hospital and maternal support, water tank donations, scholarships, and waste management campaigns. Client protection rema ins a cornerstone of our operating model, with policies and practices already aligned to the principles promoted by Cerise+SPTF and to further reinforce this commitment, we have now joined the Client Protection Pathway. Interim dividend In line with our commitment to make capital returns to shareholders, a n interim dividend of USD 0.048 per share (H1 24: USD 0.03) is being declared by the Board. The Board has elected to declare the dividend over the underlying net profit of USD 24. 2m, which excludes the impact from hyperinflation accounting, therefore implying a 20% dividend payout ratio , equivalent to the 20% payout ratio for H1 24. Climate Week NYC ASA International is featured in the Climate Week NYC Interview Series on CNBC.com with a segment titled Her Power. The video highlights how women across Africa and Asia are driving change through financial inclusion, supported by ASA International’s uniqu e lending approach, the ASA Model. Rooted in trust, accountability, and community engagement, the model helps women build businesses, strengthen families, and transform communities. An accompanying article further explores ASA International’s approach and impact. View the video and associated content here - Climate Week NYC
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ASA INTERNATIONAL GROUP PLC REPORT OF THE DIRECTORS ____________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 8 Looking ahead I would like to pay tribute to my colleagues who have been instrumental in delivering ASA International’s successes in the first half of 2025. They will also be key to delivering the growth we see for the rest of this year and going forward. Looking forward to the rest of 2025, we expect to see growing demand for loans and ever greater productivity across the organisation as we drive efficiency in the branch network and therefore reduce our cost-income ratio. From a digital transformation standpoint, we will build on the su ccesses of 2024 by continuing the roll -out of the core banking system and digital platform to Ghana and Tanzania. In addition, we are encouraged by the launch of our microinsurance product ‘ ASA LifeCare’ , and look forward to expanding this across all of ASA International’s African markets. We also expect to further strengthen the leadership teams at both the group and operating country level during the remainder of 2025. CHIEF FINANCIAL OFFICER’S H1 2025 REVIEW Tanwir Rahman, ASA International Chief Financial Officer, said: “ASA International delivered a significantly improved financial performance in H1 2025 compared to the same period in 2024 b oth in terms of top -line growth and bottom-line profit. Financial resilience has improved materially with growth in the equity base. “Robust profitability and enhanced equity levels were achieved in the first half which aligned with the focus on growing our asset base in a sustainable manner . Ghana and Pakistan were major contributors to this profitability and asset base growth , with Ghana not only seeing a significant growth in its loan book but also benefiting from the appreciation of its currency during the period . The net profit of USD 26.8m in H1 2025 includes a net positive impact from hyperinflation accounting for Ghana and Sierra Leone (USD 2. 5m). Excluding this one-off item, the underlying net profit amounted to USD 24. 2m which still represents an 73% increase compared to H1 2024. This robust profitability has meant that there is no longer material uncertainty in relation to the going concern in the financial statements. It is worth noting that Ghana and Sierra Leone are currently no longer expected to be considered hyperinflationary for the second half of 2025 as per the latest publication from the IMF. “During H1 2025, the local currencies remained stable in most of the countries with the major exception being the significant appreciation of the Ghana cedi. This resulted in a favourable outcome in the income statement in USD terms and a net positive impact on the foreign currency translation reserve in equity compared to H1 2024. Accordingly, we achieved a materially stronger total comprehensive income in H1 2025 when compared to H1 2024. “We also witnessed a strong growth in total equity at the end of H1 2025 even after the payment of the final dividend. This is mainly driven by the profit growth and positive translation impact from operating currency devaluation. “From an efficiency standpoint, we also improved the cost to income ratio in H1 2025 mainly through higher income generation which outpaced the growth in operating costs. We are delighted by the momentum of the business and are extremely confident in the outlook for continued growth for the remainder of 2025.”
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ASA INTERNATIONAL GROUP PLC REPORT OF THE DIRECTORS ____________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 9 Summary income statement (USDm unless otherwise stated) H1 2025 H1 2024 YoY Change Interest and similar income 136.1 95.2 43% Interest and similar expense (24.8) (20.1) 23% Net interest income 111.3 75.1 48% Other operating income 6.7 9.7 -31% Credit loss expense (3.2) (2.4) 33% Net operating income 114.8 82.4 39% Personnel expenses (38.3) (30.3) 26% Other operating expenses(5) (26.5) (20.5) 29% Total operating expenses (64.8) (50.8) 27% Exchange rate result (0.5) (0.6) -16% Gain/(loss) on the net monetary position (1.8) (2.6) -32% Profit before tax 47.8 28.3 68% Net profit 26.8 13.5 99% Cost-income ratio 56.4% 61.7% Net interest margin 39.6% 32.3% Return on average equity 46.1% 34.2% Net interest income Net interest income increased by 48% to USD 111.3m in H1 2025 from USD 75.1m in H1 2024. This is primarily driven by the YoY growth of 43% in interest and similar income , which increased to USD 136.1m from USD 95.2m attributable to the increased size of ASA International’s loan portfolio , especially in Ghana, Pakistan, Tanzania, Myanmar and Kenya. Interest and similar expense increased to USD 24.8m in H1 2025 from USD 20.1m in H1 2024, due to an increase in external debt to help fund the growth in the loan portfolio and relatively higher cost of funding. Overall, net interest margin improved from 32.3% in H1 2024 to 39.6% in H1 2025. Net operating income Net operating income grew by 39% to USD 114.8m in H1 2025 from USD 82.4m despite the impact of 33% higher credit loss expenses (USD 3.2m compared with USD 2.4m YoY). The credit loss expenses tracked the growth in the loan portfolio. Other operating income decreased by 31% to USD 6.7m from USD 9.7m (YoY) with H1 2024 reflecting a one-off gain from a loan re-assignment in Myanmar. Total operating expenses Total operating expenses increased by 27% from USD 50.8m in H1 2024 to USD 64.8m in H1 2025, primarily due to impact of Ghana cedi appreciation on USD -denominated costs. There was also a 26% increase in personnel expenses from USD 30.3m in H1 2024 to USD 38.3m, driven by staff expansion. Other operating expenses also contributed to overall increase , with a 29% growth from USD 20.5m in H1 2024 to USD 26.5m in H1 2025 , driven by higher administrative costs associated with ongoing business expansion . Overall, as a result of enhanced operational efficiency, the cost -income ratio improved from 61.7% in H1 2024 to 56.4% in H1 2025.
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ASA INTERNATIONAL GROUP PLC REPORT OF THE DIRECTORS ____________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 10 Gain/loss on the net monetary position The loss on the net monetary position, reflecting the impact of the application of hyperinflation accounting for Ghana and Sierre Leone, reduced to negative USD 1.8m in H1 2025 compared to negative USD 2.6m in H1 2024 given the improving inflation and macroeconomic situation seen in Ghana towards the end of 30 June 2025. The impact of CPI adjustment on other income statement items resulted in a USD 4.3m gain, which meant that the total impact of IAS 29 on net profit amounted to USD 2.5m net gain. Profitability Profit before tax increased by 68% to USD 47.8m in H1 2025 from USD 28.3m in H1 2024, given the improved income growth and cost dynamics outlined above. Accordingly, net profit also increased from USD 13.5m in H1 2024 to USD 26.8m in H1 2025, while benefiting from improvements in the effective tax rate. Effective tax rate (ETR) There was a favourable tax position in certain jurisdictions in H1 2025 compared to H1 2024. This, to some extent, contributed to the reduction in the effective tax rate (excluding withholding taxes) to 38.7% in H1 2025 from 45.1% in H1 2024. Including withholding taxes, the effective tax rate decreased to 43.9% in H1 2025 from 52 .4% in H1 2024. This reduction is mainly due to a favourable movement in the profit mix, with higher profit being generated in countries having a lower ETR such as, Ghana, Kenya and the Philippines, thereby reducing the total average tax rate for the Group as a whole. Summary balance sheet (USDm unless otherwise stated) 30 Jun 2025 31 Dec 2024 YTD Change Cash and cash equivalents 111.0 108.4 2% Loans to customers 496.1 410.0 21% Other assets 65.1 50.1 30% Total assets 672.2 568.5 18% Client deposits 119.6 90.1 33% Interest-bearing debt 341.5 312.7 9% Other liabilities(6) 75.0 69.2 8% Total liabilities 536.1 472.0 14% Share capital and reserves 138.5 98.5 41% Non-controlling interest (2.3) (2.0) 16% Total equity 136.2 96.5 41% Off-book Business Correspondence (‘BC’) and Direct Assignment Gross loan portfolio 29.7 38.0 -22% Gross OLP 540.9 458.6 18% Less ECL reserves on loans and advances plus FV adjustments on loans under FVTPL (13.5) (12.0) 12% OLP 527.4 446.6 18% PAR>30 days 2.0% 2.2%
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ASA INTERNATIONAL GROUP PLC REPORT OF THE DIRECTORS ____________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 11 Loans to customers Loans to customers, a significant asset item on the balance sheet, increased by 21% from USD 410.0m as at end of 31 December 2024 to USD 496.1m at the end of 30 June 2025 due to higher demand from clients, especially in the countries of the East African region, as well as in Pakistan and Ghana including the favourable FX impact. Accordingly, the Group’s total Outstanding Loan Portfolio (Including off-book portfolio) also increased by 18% to USD 527.4m as at 30 June 2025 from USD 446.6m as at 31 December 2024. Total assets Total assets increased by 18% to USD 672.2m as at 30 June 2025 (31 December 2024: USD 568.5m) primarily due to expansion of the loan portfolio. Cash and cash equivalents (includes due from banks) increased by 2% from USD 108.4m as at 31 December 2024 to USD 111.0m as at 30 June 2025 reflecting active liquidity management. Additionally, other assets increased by 30% to USD 65.1m as at 30 June 2025 (31 December 2024: USD 50.1m), mainly as a result of increase in intangible assets as a part of the Group’s digital transformation initiatives. Client deposits Client deposits (excluding interest payables) levels improved by 33% to USD 119.6m as at 30 June 2025 from USD 90.1m as at 31 December 2024, mainly driven by an increase in security deposits (USD 98.4m as at 30 June 2025 and USD 74.5m as at 31 December 2024) in line with the growing customer loan portfolio. Additionally, voluntary savings increased to USD 21.1m as at 30 June 2025 compared to 31 December 2024 (USD 15.7m), reflecting a growing customer appetite for savings. Interest bearing debt Third-party interest-bearing debt (excluding interest payables) increased by 9% as at 30 June 2025 to USD 341.5m from USD 312.7m as at 31 December 2024, primarily at the operating subsidiary level, with significant new transactions in Pakistan, Tanzania and Philippines, as well as at the holding, including major financing arrangements with OeEb, FMO and Oikocredit. Total equity The equity position strengthened by 41% to USD 136.2m as at 30 June 2025 from USD 96.5m as at 31 December 2024, supported by higher profitability (USD 26.8m in H1 2025 and USD 28.5m in FY 2024) and a positive impact in foreign currency translation reserve (USD 15.5m at the end of June 2025 and a negative impact of USD 4.3m at the end of December 2024) compared to year-end 2024. Equity movements (USDm) 30 Jun 2025 31 Dec 2024 Balance at the beginning of period 96.5 76.6 Impact of reclassification at FVTPL - - Net profit for the period 26.8 28.5 Change in FX translation reserve 15.5 (4.3) Movement in hedge accounting reserve 1.6 (2.2) Dividend (4.0) (3.0) Others (0.2) 0.8 Balance at the end of period 136.2 96.5
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ASA INTERNATIONAL GROUP PLC REPORT OF THE DIRECTORS ____________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 12 Impact of foreign exchange rates As a company with a reporting currency in US Dollars with operations in thirteen different currencies , there may be currency movements that can have a major impact on the consolidated USD financial performance and reporting. The effect of this can be generally categorized in the equity section in two ways: (i) existing and future local currency earnings translate into fewer US Dollar earnings, and (ii) local currency capital of any of the operating subsidiaries will translate into a lower US Dollar capital. Countries 30 Jun 2025 30 Jun 2024 Δ YoY Pakistan (PKR) 284.2 278.3 (2%) India (INR) 85.7 83.4 (3%) Sri Lanka (LKR) 299.9 306.0 2% The Philippines (PHP) 56.4 58.4 3% Myanmar (MMK) 2,098.9 2,488.7 16% Ghana (GHS) 10.3 15.3 32% Nigeria (NGN) 1,538.8 1,535.4 (0%) Sierra Leone (SLE) 22.7 22.5 (1%) Tanzania (TZS) 2,634.7 2,631.3 (0%) Kenya (KES) 129.3 129.3 0% Uganda (UGX) 3,594.7 3,710.0 3% Rwanda (RWF) 1,439.0 1,315.7 (9%) Zambia (ZMW) 23.8 24.0 1% The Ghanaian cedi (GHS) appreciated by 32% YoY, which positively impacted the USD earnings of the Group’s subsidiaries and contributed to an improvement in the foreign currency translation reserve. The total contribution to the foreign currency translation reserve in H1 2025 amounted to USD 1 5.5m, compared with a negative contribution of USD 8.7m in H1 2024. Of this, it is mainly attributable to the appreciation of the GHS with positive contribution of USD 1 6.8m, representing a significantly higher impact than the USD 3.3m negative movement recorded in H1 2024. Total comprehensive income (USDm) H1 2025 H1 2024 Profit for the period 26.8 13.5 Change in FX translation reserve 15.5 (8.7) Movement in hedge accounting reserve 1.6 (1.2) Tax on OCI and other items (0.5) 0.4 Actuarial gain on defined benefit liabilities and gain on MFX investment 0.03 0.03 Other comprehensive income/(loss) 16.7 (9.4) Total comprehensive income/(loss) for the period, net of tax 43.5 4.1
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ASA INTERNATIONAL GROUP PLC REPORT OF THE DIRECTORS ____________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 13 ASA International is prioritising the management of its other comprehensive income movement which is significantly impacted by the foreign currency exchange differences on translation of foreign operations. Comprehensive income improved to USD 43.5m in H1 2025 from USD 4.1m in H1 2024. Increased profit for H1 2025 and actual currency appreciation seen in H1 2025 specifically in Ghana contributed to this variance compared to H1 2024. Upstreaming of d ividends to the Group was also higher in H1 2025 than in H1 2024 and this remains a key point of focus particularly when local regulatory approval is required. The Group intends to minimize the impact of FX fluctuations by continuing with f requent dividend declarations by its operating entities and to explore potential equity hedging strategies. Hedging of operating entity equity has historically been hugely expensive and not deemed to offer the required cost-benefit dynamic. Furthermore, a strong focus on enhancing operational productivity will support improved financial performance and resilience against foreign currency volatilities. Funding Total funding increased to USD 597.3m as at 30 June 2025 from USD 499.3m at the end of December 2024. (USDm) 30 Jun 2025 31 Dec 2024 Local Deposits 119.6 90.1 Loans from Financial Institutions 294.3 259.8 Microfinance Loan Funds 9.8 11.0 Loans from Dev. Banks and Foundations 37.5 41.9 Equity 136.2 96.5 Total Funding 597.3 499.3 A favourable maturity profile has been maintained with the average tenor of all funding from third parties being substantially longer than the average tenor at issuance of customer loans which ranges from six to twelve months for the majority of the loans. Local deposits have increased YoY in USD terms. This increase was primarily due to significant increase in security deposits mainly in Ghana. Equity increase was primarily due to operating currency appreciation year-on-year (GHS: 32%, MMK: 16%) and higher profits. The Group remains focussed on maintaining a healthy funding mix with a majority local sourced and local currency funding. The cost of funding improved to 11.2% at the end of June 2025 from 11.4% at the end of June 2024. Lenders demonstrated their confidence in the Group and continued to provide funding as the Group was able to raise USD 1 17.7m at the end of June 2025 (31 December 2024 : USD 193.8m), and there is a substantial funding pipeline for H2 2025 amounting to USD 229m, with almost 92% having agreed terms and can be accessed in the short to medium term. There are existing credit relationships with more than 50 lenders across the world, which has provided reliable access to competitively priced funding for the growth of the loan portfolio. The Group has USD 85.8m (31 December 2024: USD 79.1m) of cash at bank and in hand as at 30 June 2025 of which USD 58.0m ( 31 December 2024 : USD 50.2m) is unrestricted and can be utilized for operational and other working capital needs. Net debt at the holding company level increased slightly to USD 66. 8m as at 30 June 2025, compared with USD 62.9m as at 30 June 2024. Despite this increase, the Group remains committed to its strategy of gradually reducing the proportion of debt funding sourced at the holding company level over time. As of 3 0 June 2025 , the balance for credit lines with breached covenants amounts to USD 18.1m (excluding the USD 8.7m in ASA India NCDs purchased from Symbiotics) and the Group has received waivers for USD 1 6.7m. The Group is still under discussion to receive waivers for the remaining USD 1.4m.
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ASA INTERNATIONAL GROUP PLC REPORT OF THE DIRECTORS ____________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 14 The H1 2025 condensed consolidated financial statements have been prepared on a going concern basis. It should be noted that in the 2024 Annual Report and Accounts, approved on 24 April 2025, senior management and the Directors concluded that there was a material uncertainty that may cast significant doubt over the Group’s ability to continue as a going concern relating to debt covenant breaches, and reputational risks leading to potential debt recalls. In performing the going concern assessment for the interim consolidated financial statements for H1 2025, the Directors have reviewed these prior concerns and considered current global economic challenges, while factoring the Group’s improved operating and financial position for the first half of 2025 and ex pectations for the period up to 30 September 2026 (the ‘Assessment Period’). The conclusion of this assessment reverses the previous view from the 2024 Annual Report and Accounts. Senior management and the Directors now conclude that there is no longer a material uncertainty that may cast significant doubt over the Group’s ability to continue as a going concern. Expected credit losses The Group increased its reserves in the balance sheet for expected credit losses (ECL) from USD 10.1m as at end of June 2024 to USD 13.9m as at end of June 2025, for its OLP, including the off -book BC portfolio in India and interest receivables. The increase was primarily due to the growth of OLP. Furthermore, the USD 13.9m of ECL reserves as at 30 June 2025 mainly relate to overdue loans in India (26%), The Philippines (25%) and Myanmar (12%), with the remainder spread across the other countries. Hyperinflation accounting The IFRS standard IAS 29 “Financial Reporting in Hyperinflationary Economies” (‘IAS 29’) requires the Group to adjust the H1 2025 financial information of operating entities, which are hyperinflationary economies with the main indicator being three -year cumulative inflation exceeding 100% in the period 2023-2025. All items are presented to reflect the current purchasing power at the reporting date. Based on this, hyperinflation accounting is applied in the interim financial statements of the Group in relation to Ghana and Sierra Leone . The application of IAS 29 results in non -cash adjustments in the presentation of the financial information of the Group . In H1 2025, the net impact was an increase in net profit of USD 2.5m, comprising a loss on net monetary position of USD 1.8m, offset by the positive impact of CPI adjustments on other income statement items of USD 4.3m. Based on the latest IMF publication , the current assessment for the remainder of 2025 is that both Ghana and Sierra Leone will not be subject to hyperinflationary accounting. Should this be the case, it would mean that the overall impact of hyperinflation accounting on the Group’s accounts in 2025 is expected to be materially reduced. Nigeria and Myanmar are on the watchlist. Regulatory capital Currently, twelve out of thirteen operating subsidiaries are subject to minimum regulatory capital requirements. As of 30 June 2025, with the exception of ASA India, there was full compliance with all relevant minimum regulatory capital requirements.
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ASA INTERNATIONAL GROUP PLC REPORT OF THE DIRECTORS ____________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 15 REGIONAL PERFORMANCE Regional snapshot H1 2025 (in USDm) South Asia South East Asia West Africa East Africa Net interest income 20.0 17.5 38.7 37.0 Credit loss expense (0.3) (1.6) (0.1) (1.1) Net operating income 21.2 17.0 38.7 34.4 Total operating expenses* (14.0) (13.6) (12.7) (20.2) Profit before tax 7.2 3.4 26.0 14.2 Net profit 3.3 2.7 17.2 9.1 H1 2024 (in USDm) South Asia South East Asia West Africa East Africa Net interest income 16.1 15.0 20.5 26.2 Credit loss expense (0.8) (0.8) (0.3) (0.5) Net operating income 16.8 15.6 20.2 25.1 Total operating expenses* (11.8) (12.4) (10.0) (14.3) Profit before tax 5.0 3.2 10.2 10.8 Net profit 1.4 2.3 6.2 6.6 *Including gain/loss on net monetary position and exchange rate differences Regional and country OLP and portfolio quality OLP (in USDm) PAR>30 days 30 Jun 2025 31 Dec 2024 30 Jun 2025 31 Dec 2024 Pakistan 93.5 89.0 0.5% 0.5% India 27.2 36.5 5.9% 5.4% Sri Lanka 5.5 5.0 4.5% 4.9% South Asia 126.2 130.5 1.6% 2.1% Philippines 61.7 58.4 6.3% 6.8% Myanmar 29.9 25.5 0.2% 0.3% South East Asia 91.6 83.9 4.3% 4.8% Ghana 129.4 67.5 0.2% 0.2% Nigeria 14.3 11.0 2.7% 4.9% Sierra Leone 6.8 6.3 9.5% 9.4% West Africa 150.4 84.8 0.9% 1.5% Tanzania 84.6 84.4 1.6% 1.3% Kenya 39.6 36.3 0.3% 0.3% Uganda 24.7 18.6 0.2% 0.2% Rwanda 6.0 4.9 4.9% 5.1% Zambia 4.2 3.1 3.2% 3.4% East Africa 159.1 147.3 1.3% 1.1% Group 527.4 446.6 2.0% 2.2%
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ASA INTERNATIONAL GROUP PLC REPORT OF THE DIRECTORS ____________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 16 South Asia Net interest income Net interest income increased by 24% reaching USD 20.0m in H1 2025 from USD 16.1m in H1 2024 despite the low contribution from India. South Asia’s net interest income is primarily driven by the strong operations of Pakistan where both the loan portfolio and interest income sho wed an improvement. Meanwhile, interest and similar expenses remained in line with the previous year (H1 2025: USD 5.6m, H1 2024: USD 5.6m), contributing to an overall improvement in the net interest margin. Net operating income Net operating income also improved by 26% to USD 21.2m in H1 2025 from USD 16.8m in H1 2024 as a result of operational expansion and reduced credit loss expenses. Total operating expenses Total operating expenses grown by 19% to USD 14.0m in H1 2025 from USD 11.8m in H1 2024, which was driven primarily by the personnel expenses increase from USD 8.3m in H1 2024 to USD 9.7m due to an expansion in the workforce to support operations. Profitability Profit before tax grew by 44% to USD 7.2m in H1 2025, compared to USD 5.0m in H1 2024, driven by improved income trends and better cost-to-income ratio ( 65.5% in H1 2025, 70.3% in H1 2024). Net profit increased by 144% to USD 3.3m in H1 2025, from USD 1.4m in H1 2024, supported by overall performance improvements, with Sri Lanka turning profitable during the period. Pakistan ASA Pakistan grew its operations in the period with increased demand from clients: • Number of clients increased from 618k to 673k (up 9% YoY) • Branch network increased to 405 branches from 345 (H1 2024) , supporting the increase in client reach • As a result, OLP increased as result from USD 89.1m to USD 93.5m (up 5% YTD) • Gross OLP/Client also increased from USD 136 to USD 140 (up 3% YTD) • PAR>30 remained at 0.5% compared to 31 December 2024 India ASA India intentionally shrank its operations in the period to 30 June 2025 , in line with the Group’s decision to deconsolidate the business, including the reassignment of loans as part of the deconsolidation process. Accordingly, the focus in the period was on recovery of overdue loans while maintaining the off-book portfolio: • Number of clients decreased from 193k to 12 9k (down 33% YoY) due to increase in new ‘off book’ loan disbursements • Number of branches reduced from 176 to 157 (down 11% YoY) • On-book portfolio decreased from USD 0.7m to USD 0.1m (down 86% YTD) • Off-book portfolio decreased from USD 35.8m to USD 27.0m (down 24% YTD) • Gross OLP/Client increased from USD 235 to USD 238 (up 1% YTD) • PAR>30 (including off-book) deteriorated from 5.4% as at December 2024 to 5.9% as at June 2025. The Board continues to work towards a full deconsolidation of ASA India from the Group by the end of December 2025.
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ASA INTERNATIONAL GROUP PLC REPORT OF THE DIRECTORS ____________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 17 Sri Lanka Lak Jaya's operations improved in the period despite heightened competition in the country: • Number of clients increased from 42k to 45k (up 6% YoY) • Number of branches reduced by 1 to 63 , due to the merger of two branches to improve efficiency and cost management • OLP increased from USD 5.0m to USD 5.5m (up 10% YTD) • Gross OLP/Client increased from USD 123 to USD 132 (up 7% YTD) • PAR>30 improved from 4.9% to 4.5% as collection efficiency is improved compared to year - end 2024 South East Asia Net interest income Net interest income increased by 17% reaching USD 17.5m in H1 2025 (H1 2024 : USD 15.0m) as Philippines demonstrated resilience of their operations despite being affect ed from typhoons and increasing their interest income. Net interest margin improved, as the interest expense remained stable (H1 2025: USD 3.8m, H1 2024: USD 3.4m). Meanwhile, interest income grew from USD 18.3m in H1 2024 to USD 21.4m in H1 2025. Net operating income Net operating income improved by 9% to USD 17.0m in H1 2025 from USD 15.6 m in H1 2024. However, it resulted in lower other operating income (H1 2025: USD 2.9 m; H1 2024: USD 3.1 m) and higher credit loss expenses (H1 2025: USD 1. 6m; H1 2024: USD 0.8 m), driven by OLP growth in both countries and a decline in portfolio quality in the Philippines. Total operating expenses Total operating expenses increased by 10% to USD 13.6m in H1 2025 from USD 12.4m in H1 2024, primarily driven by elevated personnel expenses in The Philippines in efforts to improve employee retention. Profitability Profit before tax increased by 5% from USD 3.2m in H1 2024 to USD 3.4m in H1 2025, primarily due to higher personnel and credit loss expense s in the Philippines. Net profit increased by 17% to USD 2.7m in H1 2025 from USD 2.3m in H1 2024. The Philippines Pagasa Philippines’ operations grew in the period, despite challenges created in the country by typhoons: • Number of clients remained stable at 352k • Number of branches increased from 400 to 433 (up 8% YoY) • OLP increased from USD 58.4m to USD 61.7m (up 6% YTD) • Gross OLP/Client increased from USD 171 to USD 185 (up 8% YTD) • PAR>30 improved compared to 31 December 2024 from 6.8% to 6.3%
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ASA INTERNATIONAL GROUP PLC REPORT OF THE DIRECTORS ____________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 18 Myanmar ASA Myanmar’s operations improved in the period despite the Group having to contend with the military conscription law , the large e arthquake occurrence that hit the country in March 2025 and unstable political situation. With most of the Group’s operations located in relatively safer zones, ASA Myanmar maintained effective monitoring, resulting in quality portfolio growth • Number of clients increased from 118k to 128k (up 8% YoY) • Number of branches increased from 89 to 91 (up 2% YoY) • OLP increased from USD 25.6m to USD 29.9m (up 17% YTD) • Gross OLP per client increased from USD 223 to USD 247 (up 11% YTD) • PAR>30 slightly improved compared to 31 December 2024 from 0.3% at 0.2% West Africa Net interest income Net interest income increased by 89%, totalling USD 38.7m in H1 2025, compared to USD 20.5m in H1 2024. While interest income rose due to increased demand from clients in Ghana and Nigeria. Additionally, significant currency appreciation in Ghana had a positive impact on the overall results. Net operating income Net operating income improved by 92% to USD 38.7m in H1 2025 from USD 20.2m in H1 2024, due to lower credit loss expenses (H1 2025 : USD 0.1m, H1 2024: USD 0.3m), mainly driven by a portfolio quality improvement in Nigeria. Total operating expenses The total operating expenses slightly increased by 27%, standing at USD 12.7m in H1 2025 compared to USD 10.0m, following an increase in personnel expenses to support business growth (H1 2025: USD 6.7m, H1 2024: USD 4.0m) and other operating expenses (H1 2025: USD 4.1m, H1 2024: USD 3.4m). Despite the increase in expenses, the cost -to-income ratio improved to 28.4% in H1 2025 from 35.1% in H1 2024, reflecting strong income growth. Profitability Ghana underpinned the region’s strong performance, supported by operational growth and favourable FX movements. Profit before tax increased by 155% to USD 26.0m in H1 2025 from USD 10.2m in H1 2024. An improvement in tax position further supports the net profit growth, which has increased by 177% reaching USD 1 7.2m in H1 2025 (H1 202 4: USD 6.2m) including a positive impact of hyperinflation accounting of USD 2.5m in H1 2025 (H1 2024: Negative USD 3.5m). Ghana ASA Savings & Loans operations overcame the economic challenges within the country and demonstrated tremendous performance with excellent portfolio quality and appreciating currency: • Number of clients increased from 192k to 237k (up 23% YoY) • Number of branches increased from 150 to 153 (up 2% YoY) • OLP increased from USD 67.5m to USD 129.3m (u p 92% YTD) supported by currency appreciation of the Ghanaian cedi versus the USD • Gross OLP/Client increased from USD 304 to USD 547 (up 80% YTD) • PAR>30 remained stable at 0.2% compared to 31 December 2024
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ASA INTERNATIONAL GROUP PLC REPORT OF THE DIRECTORS ____________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 19 Nigeria ASA Nigeria saw an improved operational performance despite high inflation level s and an unstable economy: • Number of clients increased from 146k to 158k (up 8% YoY) • Number of branches increased from 263 to 269 (up 2% YoY) • OLP increased from USD 11.0 to USD 14.2m (up 29% YTD) • Gross OLP/Client increased from USD 78 to USD 95 (up 21% YTD) • PAR>30 significantly improved from 4.9% as at 31 December 2024 to 2.7% as a result of improved KYC and due diligence practices Sierra Leone ASA Sierra Leone saw an improved operational performance: • Number of clients increased from 37k to 43k (up 15% YoY) • Number of branches increased from 48 to 49 (up 2% YoY) supporting the increase in client reach • OLP increased from USD 6.3m to USD 6.8m (up 8% YTD) • Gross OLP/Client increased from USD 155 to USD 172 (up 11% YTD) • PAR>30 slightly increased compared to 31 December 2024 from 9.4% to 9.5% East Africa Net interest income Net interest income saw a significant improvement of 41%, reaching USD 37.0m in H1 2025 (H1 2024: USD 26.2m) as a result of operational growth in all countries, supported by an OLP growth of 30% YoY basis. The positive effect of the increase in interest and similar income (H1 2025: USD 46.7m, H1 2024: USD 33.4m) is slightly offset by an increase in interest and similar expenses (H1 2025: USD 9.7m, H1 2024: USD 7.2m) reflecting the increased level of funding deployed to support the region’s ongoing expansion Net operating income Net operating income increased by 37% to USD 34.4m in H1 2025 from USD 25.1m in H1 2024 mainly driven by higher interest income, partly offset by an increase in credit loss expense in the region compared to last year (H1 2025: USD 1.1m, H1 2024: USD 0.5m). Total operating expenses Total operating expenses increased by 41% during H1 2025 to USD 20.2m (H1 2024: 14.3m) primarily due to an increase in personnel expenses (H1 2025: USD 11.6m, H1 2024: USD 8.9m) to support the region expansion. Despite of the increase in expenses, the operational efficiency improvement is proven by the cost-to-income ratio remaining stable at 57.7% in H1 2025 from 57.2% at H1 2024. Profitability Profit before tax improved from USD 10.8m in H1 2024 to USD 14.2m in H1 2025 as a result of substantial interest income. Net profit increased from USD 6.6m in H1 2024 to USD 9.1m in H1 2025.
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ASA INTERNATIONAL GROUP PLC REPORT OF THE DIRECTORS ____________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 20 Tanzania ASA Tanzania expanded its operations in the period: • Number of clients increased from 258k to 300k (up 17% YoY) as the more favourable loan terms are attracting an increased number of clients • Number of branches increased from 211 to 241 (up 14% YoY) supporting the increased client reach • OLP slightly increased from USD 84.4m to USD 84.6m (up 0.2% YTD) • Gross OLP/Client decreased from USD 305 to USD 286 (down 6% YTD) • PAR>30 increased slightly to 1.6% from 1.3% (31 Dec 2024) due to operational challenges Kenya ASA Kenya also expanded its operations in the period overcoming stiff competition in the market: • Number of clients increased from 237k to 279k (up 18% YoY) • Number of branches increased from 145 to 160 (up 10% YoY) in order to respond to increased client demands • As a result, OLP increased from USD 36.3m to USD 39.6m (up 9% YTD) • Gross OLP/Client increased from USD 139 to USD 142 (up 2% YTD) • PAR>30 remained stable at 0.3% compared to 31 December 2024 Uganda ASA Uganda also saw a significant improvement in operations in the period: • Number of clients increased from 131k to 179k (up 36% YoY) • Number of branches increased from 125 to 133 (up 6% YoY) • OLP increased from USD 18.6m to USD 24.7m (up 33% YTD). • Gross OLP/Client increased from USD 124 to USD 139 (up 12% YTD) • PAR>30 remained stable at 0.2% compared to 31 December 2024 Rwanda ASA Rwanda saw a strong improvement in operations in the period: • Number of clients increased from 21k to 24k (up 16% YoY) • Number of branches remained at 37 • OLP increased from USD 4.9m to USD 6.0m (up 22% YTD). • Gross OLP/Client increased from USD 228 to USD 263 (up 15% YTD). There is an emphasis on branches located in urban areas to serve to clients who have the capacity to take on higher loan sizes • PAR>30 improved to 4.9% from 5.1% as at 31 December 2024 Zambia ASA Zambia expanded its operations in the period: • Number of clients increased from 27k to 30k (up 13% YoY) • Number of branches increased from 38 to 41 (up 8% YoY) • OLP increased from USD 3.1m to USD 4.2m (up 34% YTD) • Gross OLP/Client increased from USD 114 to USD 145 (up 27% YTD) • PAR>30 improved to 3.2% from 3.4% as at 31 December 2024
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ASA INTERNATIONAL GROUP PLC REPORT OF THE DIRECTORS ____________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 21 Forward-looking statement and disclaimers This announcement does not constitute or form part of any offer or invitation to purchase, otherwise acquire, issue, subscribe for, sell or otherwise dispose of any securities, nor any solicitation of any offer to purchase, otherwise acquire, issue, subscr ibe for, sell, or otherwise dispose of any securities. The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and therefore , persons in such jurisdictions into which this announcement is released, pu blished or distributed should inform themselves about and observe such restriction. The information contained within this announcement is deemed by the Company to constitute inside information as stipulated by the Market Abuse Regulation (EU) No.596/2014, as it forms part of UK law by virtue of the European Union (Withdrawal) Act 2018 ("M AR"). Upon the publication of this announcement, this inside information is now considered to be in the public domain. The person responsible for the release of this announcement on behalf of the Company for the purposes of MAR is Tanwir Rahman, Chief Financial Officer. Notes (1) Profit before tax and net profit for H1 2025 include an IAS 29 hyperinflation positive impact of USD 2.5m (negative impact of USD 3.5m in H1 2024) in the consolidated financial statements (2) Underlying net profit excludes the IAS 29 hyperinflation positive impact of USD 2.5m in H1 2025 (negative impact of USD 3.5m in H1 2024) and one-off gain from loan re -assignment in Myanmar of USD 3.0 m in H1 2024 (3) PAR refers to ‘Portfolio at Risk’. PAR>30 is the percentage of outstanding customer loans with at least one instalment payment overdue 30 days, excluding loans more than 365 days overdue, to Gross OLP including off-book loans (4) Outstanding loan portfolio (‘OLP’) includes off -book Business Correspondence (‘BC’) loans and Direct Assignment loans, and loans valued at fair value through profit and loss (‘FVTPL’), excludes interest receivable, unamortized loan processing fees, and deducts ECL reserves from Gross OLP (5) Other operating expenses include depreciation and amortisation charges (6) Other liabilities include the following liabilities : retirement benefit, current tax, deferred tax, lease and derivative liabilities, any other liabilities, provisions and interest payables (7) ‘ASA International’, the ‘Company’, the ‘Group’ all refer to ASA International Group plc and its subsidiaries (8) ‘Holdings’ , ‘Holding companies’ or ‘Holding entities’ all refer to ASA International Holding and ASA International NV
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ASA INTERNATIONAL GROUP PLC REPORT OF THE DIRECTORS ____________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 22 Principal risks and uncertainties We have considered the principal risks and uncertainties faced by the Group for the remaining six months of the year and do not consider them to have changed from those set out on pages 40 to 48 of the 2024 Annual Report which is available on the Group’s website at asa‐international.com. These include but are not limited to: regulatory risk, credit risk, liquidity risk and foreign currency risk. Going concern The going concern assessment by the directors is described in detail in note 2.1.2 of these interim condensed financial statements. The directors have concluded that there is no longer a material uncertainty that may cast significant doubt over the Group’s ability to continue as a going concern. Accordingly, the directors continue to adopt a going concern basis for the preparation of the interim condensed financial statements. Directors' Responsibilities Statement in Respect of the Interim Results We confirm that to the best of our knowledge: - The condensed set of financial statements has been prepared in accordance with UK endorsed IFRS; - The interim management report includes a fair review of the information required by: a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the princi pal risks and uncertainties for the remaining six months of the year; and b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during t hat period; and any changes in the related party transactions described in the Annual Report for the year ended 31 December 2024 for ASA International Group plc. By order of the Board Rob Keijsers CEO 23 September 2025
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INDEPENDENT REVIEW REPORT ASA INTERNATIONAL GROUP PLC Conclusion We have been engaged by ASA International Group plc (‘the Group’) to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2025 (‘the Interim Financial Report’) which comprises the Interim Condensed Consolidated Income Statement and Statement of Comprehensive Income, the Interim Condensed Consolidated Statement of Financial Position, the Interim Condensed Consolidated Statement of Changes in Equity, the Interim Condensed Consolidated Statement of Cash Flows and related notes 1 to 35. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2025 is not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom’s Financial Conduct Authority. Basis for Conclusion We conducted our review in accordance with International Standard on Review Engagements 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" (ISRE) issued by the Financial Reporting Council. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. As disclosed in note 2.1.3, the annual financial statements of the Group are prepared in accordance with UK adopted international accounting standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with UK adopted International Accounting Standard 34, “Interim Financial Reporting”. Conclusions Relating to Going Concern Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for Conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed. This conclusion is based on the review procedures performed in accordance with this ISRE, however future events or conditions may cause the entity to cease to continue as a going concern. Responsibilities of the directors The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority. In preparing the half-yearly financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s Responsibilities for the review of the financial information In reviewing the half-yearly report, we are responsible for expressing to the Group a conclusion on the condensed set of financial statements in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 23
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INDEPENDENT REVIEW REPORT ASA INTERNATIONAL GROUP PLC Use of our report This report is made solely to the Group in accordance with guidance contained in International Standard on Review Engagements 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Group, for our work, for this report, or for the conclusions we have formed. Ernst & Young LLP London 23 September 2025 ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 24
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ASA INTERNATIONAL GROUP PLC FOR THE PERIOD ENDED 30 JUNE 2025 Notes 2025 2024 USD'000 USD'000 Unaudited Unaudited Interest income calculated using the effective interest method 4.1. 134,279 91,212 Other interest and similar income 4.2. 1,811 3,957 Interest and similar income 136,090 95,169 Interest and similar expense 5. (24,795) (20,088) Net interest income 111,295 75,081 Other operating income 6. 6,682 9,691 Total operating income 117,977 84,772 Credit loss expense 7. (3,156) (2,370) Net operating income 114,821 82,402 Personnel expenses 8. (38,284) (30,346) Depreciation on property and equipment 14. (1,254) (932) Amortisation on intangible assets (586) (303) Depreciation on right-of-use assets 15. (2,177) (1,791) Other operating expenses 9. (22,469) (17,466) Exchange rate differences (535) (635) Loss on net monetary position 2.3.4 (1,755) (2,581) Total operating expenses (67,060) (54,054) Profit before tax 47,761 28,348 Income tax expense 10. (18,504) (12,772) Withholding tax expense 10.6. (2,472) (2,095) Profit for the period 26,785 13,481 Profit for the period attributable to: Equity holders of the parent 27,104 13,878 Non-controlling interest (319) (397) 26,785 13,481 Other comprehensive income: Foreign currency exchange differences on translation of foreign operations 21. 15,518 (8,669) Movement in hedge accounting reserve 1,598 (1,150) Tax on OCI and other items (454) 384 16,662 (9,435) Gain on revaluation of MFX investment 30 20 30 20 Total comprehensive income for the period, net of tax 43,477 4,066 Total comprehensive income attributable to: Equity holders of the parent 43,791 4,457 Non-controlling interest (314) (391) 43,477 4,066 Earnings per share 35. Equity shareholders of the parent for the period: Basic earnings per share 0.27 0.14 Diluted earnings per share 0.27 0.14 The notes 1 to 35 form an integral part of the interim condensed consolidated financial statements. INTERIM CONDENSED CONSOLIDATED INCOME STATEMENT AND STATEMENT OF OTHER COMPREHENSIVE INCOME Total other comprehensive income/(loss) to be reclassified to profit or loss in subsequent periods, net of tax Total other comprehensive income not to be reclassified to profit or loss in subsequent periods, net of tax For the six months ended 30 June ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 25
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Company Number: 11361159 ASA INTERNATIONAL GROUP PLC INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2025 Notes 30 June 2025 31 December 2024 USD'000 USD'000 Assets Unaudited Audited Cash at bank and in hand 11. 85,802 79,145 Loans and advances to customers 12. 496,082 409,977 Due from banks 13. 25,214 29,263 Equity investments at Fair Value through Other Comprehensive Income ('FVOCI') 345 315 Property and equipment 14. 15,299 7,597 Right-of-use assets 15. 6,187 5,372 Deferred tax assets 10.2. 6,842 7,277 Other assets 16. 20,131 18,786 Derivative assets 17. 852 258 Intangible assets 18. 15,479 10,512 Total assets 672,233 568,502 Equity and liabilities Equity Issued capital 19. 1,310 1,310 Retained earnings 20. 235,172 212,102 Other reserves 2,769 1,371 Foreign currency translation reserve 21. (100,793) (116,311) Total equity attributable to equity holders of the parent 138,458 98,472 Total equity attributable to non-controlling interest (2,295) (1,981) Total equity 136,163 96,491 Liabilities Debt issued and other borrowed funds 22. 350,600 320,850 Due to customers 23. 120,352 90,171 Retirement benefit liability 7,431 6,856 Current tax liability 10.1. 6,663 14,179 Deferred tax liability 10.3. 5,308 4,635 Lease liabilities 15. 4,142 3,925 Derivative liabilities 17. 1,574 3,252 Other liabilities 24. 37,329 25,939 Provisions 25. 2,671 2,204 Total liabilities 536,070 472,011 Total equity and liabilities 672,233 568,502 Approved by the Board of Directors on 23 September 2025 Signed on behalf of the Board The notes 1 to 35 form an integral part of the interim condensed consolidated financial statements. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 26
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ASA INTERNATIONAL GROUP PLC INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 JUNE 2025 Notes Issued capital Retained earnings Other reserves Foreign currency translation reserve Non-controlling interest Total USD '000 USD '000 USD '000 USD '000 USD '000 USD '000 At 1 January 2024 1,310 185,864 2,758 (111,998) (1,324) 76,610 Profit for the six month period ending June 2024 - 13,878 - - (397) 13,481 Share-based payments - - 428 - - 428 Other comprehensive income (loss) Foreign currency translation of assets and liabilities of subsidiaries - - - (8,669) - (8,669) Gain on revaluation of MFX investment - - 20 - - 20 Movement in hedge accounting reserve - - (1,150) - - (1,150) Other comprehensive income (net of tax) - - 378 - 6 384 Total comprehensive income for the period - 13,878 (324) (8,669) (391) 4,494 Dividend - - - - - - At 30 June 2024 (Unaudited) 1,310 199,742 2,434 (120,667) (1,715) 81,104 Profit for the six month period ending December 2024 - 15,371 - - (319) 15,052 Share-based payments - - 281 - - 281 Other comprehensive income (loss) Actuarial gains and losses on defined benefit liabilities - - (1,243) - - (1,243) Foreign currency translation of assets and liabilities of subsidiaries (59) 4,356 59 4,356 Movement in hedge accounting reserve - - (1,010) - - (1,010) Other comprehensive income (net of tax) - - 909 - (6) 903 Total comprehensive income for the period - 15,312 (1,063) 4,356 (266) 18,339 Dividend - (2,952) - - - (2,952) At 31 December 2024 (Audited) 1,310 212,102 1,371 (116,311) (1,981) 96,491 At 1 January 2025 1,310 212,102 1,371 (116,311) (1,981) 96,491 Profit for six month period ending June 2025 - 27,104 - - (319) 26,785 Share based payments - - 229 - - 229 Other comprehensive income (loss) Foreign currency translation of assets and liabilities of subsidiaries - - - 15,518 - 15,518 Gain on revaluation of MFX investment - - 30 - - 30 Movement in hedge accounting reserve - - 1,598 - - 1,598 Tax on OCI and other items - - (459) - 5 (454) Total comprehensive income for the period - 27,104 1,398 15,518 (314) 43,706 Dividend - (4,034) - - - (4,034) At 30 June 2025 (Unaudited) 1,310 235,172 2,769 (100,793) (2,295) 136,163 The notes 1 to 35 form an integral part of the interim condensed consolidated financial statements. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 27
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ASA INTERNATIONAL GROUP PLC INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 30 JUNE 2025 Notes 2025 2024 USD'000 USD'000 Unaudited Unaudited OPERATING ACTIVITIES Profit before tax 47,761 28,348 Adjustment for movement in: Operating assets 26.1. (63,117) (42,060) Operating liabilities 26.2. 19,427 17,837 Non-cash items 26.3. 12,184 15,006 Taxes paid (22,789) (11,528) Net cash flows (used in)/from operating activities (6,534) 7,603 INVESTING ACTIVITIES Purchase of property, plant and equipment (7,238) (1,427) Proceeds from sale of property, plant and equipment 3 25 Purchase of Intangible assets (3,103) (1,340) Net cash flow used in investing activities (10,338) (2,742) FINANCING ACTIVITIES Proceeds from debt issued and other borrowed funds 87,406 98,796 Payments of debt issued and other borrowed funds (58,622) (78,466) Payment of principal portion of lease liabilities (2,390) (2,090) Dividend paid (4,034) - Net cash flow (used in)/from financing activities 22,360 18,240 Cash and cash equivalents at 1 January 79,145 76,429 Net increase in cash and cash equivalents 5,488 23,101 1,169 (4,272) Cash and cash equivalents as at 30 June 85,802 95,258 Operational cash flows from interest Interest received 137,752 95,946 Interest paid 26,430 21,147 The notes 1 to 35 form an integral part of the interim condensed consolidated financial statements. Foreign exchange difference on cash and cash equivalents For the six months ended 30 June ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 28
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 1. CORPORATE INFORMATION ASA International Group plc ('ASA International', 'Group', 'ASAIG', 'Company') is a public company limited by shares which was incorporated by Catalyst Microfinance Investors ('CMI') in England and Wales on 14 May 2018 for the purpose of the initial public offer of ASA International Holding. ASA International Group plc has a listing on the Main Market of the London Stock Exchange, within the equity shares (commercial companies) category. The interim condensed consolidated financial statements of ASAIG for the six months ended 30 June 2025 were authorised for issue in accordance with a resolution of the directors on 23 September 2025. Investment strategy ASA International Group plc is a microfinance holding company, operating through its various subsidiaries in Asia and Africa. Abbreviation list Definitions Abbreviation A1 Nigeria Consultancy Limited A1 Nigeria ASA Dwaso Limited ASA Dwaso ASA International Group plc ASAIG ASA International Holding ASAIH ASA International Group plc Employee Benefit Trust ASAIG plc EBT ASA International India Microfinance Limited ASA India ASA International (Kenya) Limited (formerly ‘ASA International Microfinance (Kenya) Limited’) ASA Kenya ASA International N.V. ASAI NV ASA Lanka Private Limited ASA Lanka ASA Microfinance (Myanmar) Ltd ASA Myanmar ASA Microfinance (Rwanda) Limited ASA Rwanda ASA Microfinance (Sierra Leone) ASA Sierra Leone ASA Microfinance (Zanzibar) Limited ASA Zanzibar ASA Microfinance (Tanzania) Limited ASA Tanzania ASA Leasing ASAB Lanka ASA Microfinance (Uganda) Limited ASA Uganda ASA Microfinance Zambia Limited ASA Zambia ASA NGO-MFI registered in Bangladesh ASA NGO Bangladesh ASA Microfinance Bank (Pakistan) Limited ASA Pakistan ASA Savings & Loans Limited ASA S&L ASHA Microfinance Bank Limited ASA Nigeria ASAI Investments & Management B.V ASAI I&M ASAI Management Services Limited AMSL Association for Social Improvement and Economic Advancement ASIEA C.M.I. Lanka Holding (Private) Limited CMI Lanka Catalyst Continuity Limited Catalyst Continuity Catalyst Microfinance Investment Company CMIC Catalyst Microfinance Investors CMI CMI International Holding CMII Lak Jaya Micro Finance Limited Lak Jaya Pagasa ng Masang Pinoy Microfinance, Inc Pagasa PagASA ng Pinoy Mutual Benefit Association, Inc. MBA Philippines Pagasa Consultancy Limited Pagasa Consultancy Pagasa Philippines Finance Corporation PPFC Pagasa Philippines Finance Corporation and Pagasa ng Masang Pinoy Microfinance, Inc Pagasa Philippines Pinoy Consultancy Limited Pinoy PT PAGASA Consultancy PT PAGASA Consultancy Microfinance Institution MFI Reserve Bank of India RBI State Bank of India SBI Sequoia B.V. Sequoia ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 29
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 1. CORPORATE INFORMATION2. ACCOUNTING POLICIES 2.1.1 General The interim condensed consolidated financial statements of ASA International Group plc have been prepared on a historical cost basis, except for loans that failed SPPI tests, derivative instruments and equity instruments, which have been measured at fair value. Additionally, the financial information of subsidiaries operating in hyperinflationary economies have been adjusted to reflect their current purchasing power. The operational and presentation currency is USD. All values are rounded to the nearest USD thousand except where otherwise indicated. 2.1.2 Going Concern The H1 2025 condensed consolidated financial statements have been prepared on a going concern basis. It should be noted that in the 2024 Annual Report and Accounts, approved on 24 April 2025, senior management and the Directors concluded that there was a material uncertainty that may cast significant doubt over the Group’s ability to continue as a going concern relating to debt covenant breaches, and reputational risks leading to potential debt recalls. In performing the going concern assessment for the interim consolidated financial statements for H1 2025, the Directors have reviewed these prior concerns and considered current global economic challenges, while factoring the Group’s improved operating and financial position for the first half of 2025 and expectations for the period up to 30 September 2026 (the ‘Assessment Period’). The conclusion of this assessment reverses the previous view from the 2024 Annual Report and Accounts. Senior management and the Directors now conclude that there is no longer a material uncertainty that may cast significant doubt over the Group’s ability to continue as a going concern. The Group has updated its detailed financial model for its budget and projections (the ‘Projections’) using the actual numbers up to June 2025 and revised its forecasts for the Assessment Period. These forecasts were based on a detailed set of key operating and financial assumptions, including the minimum required cash balances, capital and debt funding plan per operating subsidiary, senior management’s estimation of increased credit and funding risks, and current economic challenges faced by operating subsidiaries. Given the continued increase in demand for its financial products and services across markets, which provides resources and access to capital to the financially underserved, the Group has a high degree of confidence that the additional risks posed by any particular challenges in any of its markets will not increase arrears materially, however, this remains a risk. The Group remains well capitalised and in compliance with capital requirements in all markets, with the exception of India, as is further disclosed. In terms of liquidity, the Group has USD 58.0 million (2024: USD 50.2 million) of unrestricted cash and cash equivalents which is freely available for operational needs as of 30 June 2025, and a strong funding pipeline of USD 223.7 million (2024: USD 120.7 million) with 97% having agreed terms and which can be accessed in the short to medium term. This reaffirms the confidence lenders have in the strength of the Group’s business model and forward guidance. Additionally, given the improved operating and financial performance in H1 2025, the Group is confident it will continue to internally generate positive cash flows which will contribute to fully fund the projected loan portfolio throughout the Assessment Period. The Group does not expect a significant increase in credit loss expenses with collections in the high 95% range and the proportion of loans with overdue payments greater than 30 days ('PAR>30 days') improving to 1.8% as of June 2025. This improvement is highlighted by significant decreases of PAR>30 in the Philippines, Sri Lanka, Nigeria and Rwanda compared to YE 2024. Although PAR>30 days remains high in India and Sierra Leone, management expects improvement in second half of 2025 through targeted collection strategies. ASA India’s ability to operate a sustainable business remained a concern, while Management made progress with its Board approved mandate to divest ASA India. ASA India has since submitted a formal request to the State Bank of India to withdraw its NBFI license, the process is currently ongoing. The Group also acquired a significant portion of ASA India’s debt to help the business better manage its outstanding obligations. Management expects that the proposed process to divest ASA India will improve the Group’s sustainability as the entity’s IFRS losses will cease to detract from the Group’s future net results and the divestment will have a positive effect on the Group’s equity, since the level of equity value in ASA India is negative under IFRS. While there remains uncertainty about how international lenders will react should the proposed actions by the Group to divest ASA India fail to materialize, or in case of potential dissolution of the business, the Management views this risk as low given: (i) developments around India have been consistently communicated with the market through multiple channels, including the Group’s Annual Report, and Quarterly Business Updates, and throughout 2024 and H1 2025 giving ample time and clarity for lenders to assess the situation and act if deemed necessary, (ii) The Group successfully purchased the sub-debt held by the last outstanding international lender to ASA India, which has continued to provide funding to the Group, (iii) continued flow of funding to other ASA International entities and Holdings (USD 117m in new debt funding received in H1 2025) and consistent transaction pricing reflects sustained lender confidence and unchanged risk perception, and (iv) the Group does not provide parent guarantees to funders of the operating subsidiaries and hence in case of dissolution of ASA India, the Group’s risk is limited to its capital investment and intercompany loans to the entity. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 30
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 1. CORPORATE INFORMATION2. ACCOUNTING POLICIES (Continued) 2.1.2 Going Concern (Continued) Moreover, as there are no cross-default clauses in the loan agreements with the Group holdings or other Group MFIs, any potential lender response would likely be limited to delaying or declining new funding. Though the likelihood of such actions is seen as low as outlined above, management has assessed this possibility in its stress tests which demonstrated the Group’s ability to sustain its operations under such funding constraints over the assessment period. As of 30 June 2025, out of the total outstanding debt of USD 341.5 million (2024: USD 312.7 million), credit lines with breached covenants amounted to USD 26.8 million (USD 28.2 million in December 2024) of which waivers have been received for USD 25.4 million, though they do not cover the complete period through to 30 September 2026. Such breaches have not historically resulted in an immediate repayment request from lenders, of which about 58% are impact investors with more lenient approach to such breaches compared to commercial FIs, further evidenced by the supportive attitude of lenders in the last five years with provision of requested waivers and additional funding. Unless the covenant breach waivers are obtained as and when required the debt may be called due, which could impact the ability of subsidiaries and the Group to meet its debt obligations. The Group has a history of negotiating covenant waivers, where required, and has eventually received waivers for all breaches in the past following the post-balance sheet date, which indicates that the chance of an early debt call is low. Though, this does not guarantee that waivers necessary to avoid the immediate repayment of debt or further extension of loan terms will be forthcoming in the future. In terms of mitigation of such potential debt recall, the Group can utilize its existing unrestricted cash, or raise additional liquidity by focusing on the collection of existing loans from clients while curtailing disbursements, which can generate up to USD 118 million in cash monthly as of June 2025 across its operating entities. This is not a preferred action but can be utilised to quickly raise liquidity in any country's operations to settle any debt recalls. This capacity has been demonstrated in practice in the Philippines, Myanmar, Sierra Leone and Pakistan in the last 5 years when there were events that created funding gaps, with the institutions shrinking their loan portfolios to pay down maturing debt. Further, the holding entities within the Group did not provide parent guarantees nor cross default clauses to funders of the operating subsidiaries, which protects the Group. Senior management and the Board of Directors extensively challenged the Projections and their underlying assumptions including the above considerations. They also considered the risks around economic uncertainties resulting from high inflation, devaluation of local currencies, delays in dividend distributions, and increased operational costs. The Group also prepared stress and reverse stress scenarios for cash flows including the mitigating actions which include distribution of dividends and short- term loans from subsidiaries with sufficient cash reserves. Having assessed the Projections, downtrend analysis and mitigation plans, senior management and the Directors have a reasonable expectation that the Group has adequate resources to continue its operations for at least twelve months from the date of approval of the condensed consolidated financial statements for H1 2025, and through to 30 September 2026. Therefore, they continue to adopt a going concern basis for the preparation of the interim condensed consolidated financial statements for 2025. Accordingly, these financial statements do not include any adjustments to the carrying amount or classification of assets and liabilities that would result if the Group was unable to continue as a going concern. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 31
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 1. CORPORATE INFORMATION2. ACCOUNTING POLICIES (Continued) 2.1.3 Statement of compliance The interim condensed consolidated financial statements of ASA International Group plc for the six months ended 30 June 2025 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and UK- adopted International Accounting Standard 34: Interim Financial Reporting. These condensed financial statements do not constitute statutory accounts as defined in section 434 of the Companies Act 2006 and do not include all information and disclosures required in an Annual Report. They should be read in conjunction with the Group's Annual Report and Accounts for the year ended 31 December 2024. Group's Annual Report and Accounts for the year ended 31 December 2024 included an unqualified audit report that made reference to a material uncertainty related to going concern and did not contain any statements under sections 498 (2) and (3) of the Companies Act 2006. A copy of this annual report has been delivered to the Registrar of Companies. In preparing the interim condensed financial statements, the same accounting policies, methods of computation and presentation have been applied as set out in the Annual Report and Accounts 2024 which is available on the Group’s website at https://www.asa-international.com. The preparation of the Interim condensed consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. After the issue of the financial statements the Company’s owners or others do not have the power to amend the financial statements. 2.1.4 Basis of consolidation The interim condensed consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 30 June for each half year. The financial statements of subsidiaries are similarly prepared for the half year ended 30 June 2025 applying similar accounting policies and on a going concern basis. 2.2. New standards, interpretations and amendments adopted by the Group The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2024 other than the amendment disclosed in note 2.2.1. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective and none of those are material for the Group. 2.2.1 Lack of exchangeability – Amendments to IAS 21 The amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information that enables users of its financial statements to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, the entity’s financial performance, financial position and cash flows. The amendments are effective for annual reporting periods beginning on or after 1 January 2025. When applying the amendments, an entity cannot restate comparative information. The amendments did not have any impact on the Group’s interim financial statements. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 32
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 1. CORPORATE INFORMATION 2. ACCOUNTING POLICIES (Continued) 2. ACCOUNTING POLICIES (Continued) 2.3 Significant accounting judgement and estimates 2.3.1 Allowance for expected credit loss (ECL) in loans and advances The Group calculates the allowance for ECL in a three step process as described below under A to D. The Group reviews its loans at each reporting date to assess the adequacy of the ECL as recorded in the financial statements. In particular, judgement is required in the estimation of the amount and timing of future cash flows when determining the level of allowance required. Such estimates are based on certain assumptions such as the financial situation of the borrowers, types of loan, maturity of the loans, ageing of the portfolio etc. The actual performance of loans may differ from such estimates resulting in future changes to the allowance. Due to the nature of the industry in which the Group operates, i.e. micro credit to low income clients, the loan portfolio consists of a very high number of individual customers with low value exposures. These characteristics lead the Group to use a provisioning methodology based on a collective assessment of similar loans. The Group's policy for calculating the allowance for ECL is described below: A) Determination of loan staging The Group monitors the changes in credit risk in order to allocate the exposure to the correct staging bucket. Given the nature of the Group's loan exposures (generally short term exposures, <12 months) no distinction has been made between stage 1 (12 months ECL) and stage 2 loans (lifetime ECL) for calculating the ECL provision. Any loans overdue more than 31-90 days are recognised as stage 2 loans. Loans overdue more than 90 days are recognised as stage 3 loans. B) Calculating ECL for stage 1-2 loans To avoid the complexity of calculating the separate probabilities of default and loss-given default, the Group uses a ‘loss rate approach’ for the measurement of ECLs under IFRS 9. Using this approach, the Group developed loss-rate statistics on the basis of the net amounts written off over the last five years (Gross write-off less subsequent recovery). The historical loss rates include the impact of security deposits held by the Group, which is adjusted with overdue amounts before loans are written off. ECL recorded purely based on historical loss comes to USD 1.6 million (2024: USD 1.5 million). If there were a relative increase in the loss rate of 1%, the ECL requirement would rise by USD 16K. The forward looking element of the ECL model is constructed through looking at the trend in net write-off information from the prior three years and applying a scaled loss rate in order to anticipate future loss events. ECL as per the forward-looking element amounts to USD 621K (2024: USD 126K). Changing the write-off trend to two years, rather than three years for the forward- looking assessment, would reduce ECL by USD 426K. C) Calculating ECL for stage 3 loans The Group considers a loan to be credit impaired when it is overdue for more than 90 days. The ECL applied to net stage 3 loans (after adjusting the security deposit which is held as collateral in certain countries) is at a rate below: Senior management considered a higher loss rate (80% for the loans bucketed between 91-180 days and 100% for loans over 180 days overdue) in India, Myanmar, Pakistan, Nigeria, the Philippines, Sri Lanka, Tanzania, Sierra Leone and Zambia in view of operating challenges faced in these countries on account of high Portfolio at Risk (‘PAR’), market challenges and political instability which might lead to reduction in recoveries. In other countries, the loss rates considered are 50% for the loans bucketed between 91–180 days and 70% for loans over 180 days overdue. These loss rates are consistent with 2024. Based on the above, ECL for stage 3 loans amounts to USD 8.3 million (2024: USD 7.4 million). An alternative assessment of stage 3 provisions would be to apply a 100% loss rate across the entire stage 3 population (net of security deposit), being all loans more than 90 days past due. This would increase the ECL on the stage 3 population to USD 8.8 million. Overdue age Staging Current 1–30 days 31–90 days Stage 2 > 90 days Stage 3 Stage 1Loan bucket based on overdue age ECL for stage 3 loans Overdue age 2025 2024 91-180 days 50 and 80% 50 and 80% 181-365 days 70 and 100% 70 and 100% Over 365 days 100% 100% Loss % ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 33
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 1. CORPORATE INFORMATION2. ACCOUNTING POLICIES (Continued) 2.3 Significant accounting judgement and estimates (Continued) 2.3.1 Allowance for expected credit loss (ECL) in loans and advances (Continued) D) Management overlay The Group considers taking additional ECL provision as management overlay to reflect the impact of all possible risk exposures which are not covered under A–C above. These risks mainly include political, regulatory, environmental (climate) and other operational risks in specific markets where the Group operates. The Group has taken an additional ECL provision of USD 0.3 million (2024: USD 0.9 million) as of current reporting date under management overlay. E) Impact of macro-economic indicators The Group provides small loans to clients who are self-employed but operate their own small businesses in the informal sector and are less impacted by macro-economic trends than other business sectors. In addition, the Group’s loans average six months until maturity at the period end and so the impact of macro-economic factors on the repayment of loans is inherently limited. Hence, management concluded that changes in macro-economic indicators do not have any direct correlation with the ASA business model and therefore, no adjustment was made to consider forecasts for such macro-economic indicators in the forward-looking element of its expected credit loss provision calculation. F) Impact of climate change The Group and its customers are exposed to the physical risks from climate change and risks of transitioning to a net-zero economy. Most climate-related physical risks are expected to manifest over a term that is generally much longer than the maturity of most of the outstanding exposures. The Group has identified the ECL provision as one of the main areas in which it could be exposed to the financial impacts of climate change risk, as a number of the Group’s operating areas are prone to natural disasters such as typhoons, flash floods or droughts. The Group’s expected credit loss model captures the expected impact of the climate related risks through the historical loss data that feeds the model, which also includes write-offs due to such natural disasters. In addition, management monitors the situation in each of its operating territories post the balance sheet date for any factors that should be considered in its period-end ECL calculations. As the Group’s loans are short-term, the impact of such events over the life of the loans would naturally be limited. Hence, no additional changes have been made in the existing model on account of climate related risks. However, given the evolving risks associated with climate change, management will continue to monitor whether adjustments to its ECL models are required for future periods. G) Business Correspondence ('BC') portfolio and Direct Assignment ('DA') Portfolio of ASA India An ECL assessment has been also performed for the off–book Business Correspondence (‘BC’) portfolio of ASA India (see note 12 for details on the BC portfolio). The off–book BC portfolio consists of disbursements on behalf of IDFC First Bank, Jana Small Finance Bank (JSFB), Ujjivan Small Finance Bank Limited (Ujjivan) and ESAF Small Finance Bank Limited (ESAF). IDFC BC is subject to a maximum provision of 5% of Outstanding Loan Portfolio (‘OLP’), which is the maximum credit risk exposure for ASA India as per the agreement with IDFC. Credit risk exposure for ESAF is 5% and Ujjivan 100% of overdue portfolio. Risk exposure for JSFB is upto the loan outstanding. ECL for those portfolios are assessed in line with ASA India's own OLP. ECL for the off- book BC portfolio comes to USD 2.7 million (2024: USD 2.2 million). The portion of the DA portfolio of ASA India which is on-book has also been treated the same as a regular portfolio. No provision for the off-book portion of the DA portfolio was made because, as per the agreement with the State Bank of India, ASA India has no credit risk on this part of the DA portfolio. H) ECL on interest receivable ECL for Interest receivable is assessed in the same line as OLP. ECL for interest receivable comes to USD 477K (2024: USD 551K). ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 34
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 1. CORPORATE INFORMATION2. ACCOUNTING POLICIES (Continued) 2.3 Significant accounting judgements and estimates (Continued) 2.3.1 Allowance for expected credit loss (ECL) in loans and advances (Continued) Based on the above assessment the total provision for expected credit losses for loans and advances to customers can be summarised as follows: 2.3.2 Fair value measurement The Group measures financial instruments such as derivatives, equity investments at fair value at each balance sheet date. Apart from that certain loans which failed the SPPI test on account of the application of IFRS 17 are also measured at Fair Value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: (i) in the principal market for the asset or liability; or (ii) in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities; Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. When the fair values of financial assets and financial liabilities recorded in the statement of financial position cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the discounted cash flow (‘DCF’) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs, such as liquidity risk, credit risk and volatility. Own portfolio Off-book portfolio Interest receivable Total Own portfolio Off-book portfolio Interest receivable Total Particulars USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 ECL as per historical default rate 1,553 1,588 13 3,154 1,480 1,185 3 2,668 ECL for forward considerations 621 - 8 629 126 - 3 129 ECL under stage 3 loans 8,264 1,083 456 9,803 7,357 719 545 8,621 ECL under management overlay 284 - - 284 608 300 - 908 10,722 2,671 477 13,870 9,571 2,204 551 12,326 Unaudited 30 June 2025 Audited 31 December 2024 Gross outstanding ECL Coverage Gross outstanding ECL Coverage Allocated to: USD'000 USD'000 % USD'000 USD'000 % Own portfolio (note 12.1 and 12.4) 511,003 10,722 2% 420,355 9,571 2% Off book BC portfolio (note 12.2 and note 25) 29,035 2,671 9% 37,255 2,204 6% Interest receivable (note 12.1 and note 12.4) 5,600 477 9% 7,294 551 8% 545,638 13,870 3% 464,904 12,326 3% 30 June 2025 31 December 2024 Unaudited Audited ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 35
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 1. CORPORATE INFORMATION2. ACCOUNTING POLICIES (Continued) 2.3 Significant accounting judgements and estimates (Continued) 2.3.3 Taxes Deferred tax assets Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies. In assessing the probability of recovery, the Group has used its five-year business plan which is consistent with last year's assessment. This business plan was also used for the Going concern assessment. As at 30 June, the gross amount and expiry dates of losses available for carry forward are as follows: If the Group was able to recognise all unrecognised deferred tax assets, profit and equity would have increased by USD 20.0 million (2024: 18.9 million). Deferred tax liabilities As of 30 June 2025, the Group has undistributed profits in its subsidiaries amounting to USD 102.3 million (2024: USD 68.9 million). The Group recognised a deferred tax liability amounting to USD 4.7 million on USD 65.3 million (2024: USD 4.4 million on USD 50.0 million) of undistributed profits on the assessment that these will be distributed in the next 1 year. The judgement was used to determine the period on account of regulatory uncertainity on when the undistributed amounts can be distributed. No deferred tax liability was recognised on the balance of USD 37.0 million (2024: USD 19.0 million). If the Group recognises a deferred tax liability on these profits, profit and equity would decrease by USD 3.3 million (2024: USD 2.9 million). 30 June 2025 Expiring within 1 year Expiring within 2-5 years Expiring beyond 5 years Unlimited Total USD'000 USD'000 USD'000 USD'000 USD'000 Losses for which deferred tax asset is recognised - - - - - Losses for which deferred tax asset is not recognised 1,740 7,379 39,887 39,076 88,082 1,740 7,379 39,887 39,076 88,082 31 December 2024 Expiring within 1 year Expiring within 2-5 years Expiring beyond 5 years Unlimited Total USD'000 USD'000 USD'000 USD'000 USD'000 Losses for which deferred tax asset is recognised - - - - - Losses for which deferred tax asset is not recognised 2,851 5,338 38,221 36,200 82,610 2,851 5,338 38,221 36,200 82,610 Unaudited Audited ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 36
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 1. CORPORATE INFORMATION2. ACCOUNTING POLICIES (Continued) 2.3 Significant accounting judgements and estimates (Continued) 2.3.4 Hyperinflation Under IAS 29, ‘Financial Reporting in Hyperinflationary Economies’, consolidated financial statements prepared based on historical cost must be adjusted with the current purchasing power when operations are in an economy with hyperinflation. This involves applying a general price index that enables the financial information of the subsidiaries operating in a hyperinflationary economy to be presented in the measuring unit in force at the reporting date. All non-monetary assets and liabilities of the subsidiaries operating in a hyperinflationary economy must therefore be adjusted for inflation in order to reflect changes in purchasing power at the reporting date. Similarly, the income statement is adjusted for inflation during the period. Monetary items do not need to be restated/adjusted as they already reflect purchasing power at the reporting date. IAS 29 does not establish an absolute rate at which hyperinflation is deemed to arise. It is a matter of judgement when restatement of financial statements in accordance with this accounting standard becomes necessary. One of the key quantitative indicators is that, the cumulative inflation rate over three years is approaching, or exceeds, 100%. ASA International operates in thirteen countries across Asia and Africa, and monitors the inflation rates in an inflation dashboard which is used as one indication of the existence of hyperinflation, together with an assessment of other economic conditions. As of the end of 2023, Ghana and Sierra Leone were classified as hyperinflationary economies. The Group implemented hyperinflation accounting for the first time that year, in accordance with the reporting standard. This accounting treatment was carried forward into 2024 due to persistent hyperinflationary situation in both countries. As of 30 June 2025, Ghana and Sierra Leone continue to meet the criteria for hyperinflationary economies, and as such, the Group has maintained hyperinflation accounting for its operations in these jurisdictions. The application of IAS 29 includes the following adjustments: - Adjustment of historical cost non-monetary assets, liabilities and stated capital for the change in purchasing power caused by inflation from the date of initial recognition or contribution to the balance sheet date; - Adjustment or contribution of the income statement for inflation during the year; - The income statement is translated at the period-end foreign exchange rate instead of a monthly average rate; - A net monetary gain or loss adjustment, recognised in the income statement, to reflect the impact of inflation on holding monetary assets and liabilities in local currency; and - Adjustment in the cash flow statement to reflect the current purchasing power. The impact of the implementation of IAS 29 in the interim consolidated financial statements of the Group is as follows: Before adjustment Impact of IAS 29 adjustment After adjustment Before adjustment Impact of IAS 29 adjustment After adjustment USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 Total assets 671,737 496 672,233 567,759 743 568,502 Total liabilities 535,863 207 536,070 471,879 132 472,011 Total equity 135,874 289 136,163 95,880 611 96,491 Before adjustment Impact of IAS 29 adjustment After adjustment Before adjustment Impact of IAS 29 adjustment After adjustment USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 Profit for the period 24,241 2,544 26,785 17,005 (3,524) 13,481 Total comprehensive income/(loss) 43,188 289 43,477 3,812 254 4,066 Break-down of impact for IAS 29 in income statement Loss on net monetary position (1,755) (2,581) Impact of CPI adjustment on other P&L items 4,299 (943) Total impact of IAS 29 adjustments on net profit 2,544 (3,524) 30 June 2025 Six months ended 30 June 2025 31 December 2024 Six months ended 30 June 2024 Consolidated income statement and statement of comprehensive income Consolidated statement of financial position ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 37
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 1. CORPORATE INFORMATION Policy Judgements Estimates Note ref. Allowance for ECL on loans and advances - Identification of staging of the loan portfolio. - Criteria for a significant increase in credit risk. - Identification of credit-impaired loans. - Monitoring impact of climate change. - Back-testing based on the historical default trend. - Forward-looking considerations. - Management overlay. 2.3.1 Deferred tax assets - Determining whether it is probable that future profit will be available to utilise DTA. - Estimating the amount of DTA based on timing and likelihood of future taxable profit. - Estimation of future tax rates for DTA. 2.3.3 and 10.2 Deferred tax liability - Determination whether there are any constraints or regulatory restrictions to distribute retained earnings as dividend. - Estimating the amount of DTL based on timing and likelihood of future taxable amount and undistributed dividends from subsidiaries. - Estimation of future tax rates for DTL. 2.3.3 and 10.3 Hyperinflation - Determining whether the economy of a country meets the criteria for hyperinflation as per IAS 29. - Selection of appropriate sources for CPIs. - Estimation of CPI rates. 2.3.42. ACCOUNTING POLICIES (Continued) 2.3 Significant accounting judgements and estimates (Continued) A summary of material judgements and estimates is as follows: 3. SEGMENT INFORMATION For management purposes, the Group is organised into reportable segments based on its geographical areas and has five reportable segments, as follows: • West Africa, which includes Ghana, Nigeria and Sierra Leone. • East Africa, which includes Kenya, Uganda, Tanzania, Rwanda and Zambia. • South Asia, which includes India, Pakistan and Sri Lanka. • South East Asia, which includes Myanmar and the Philippines. • Non-operating subsidiaries, which include holding entities and other entities without microfinance activities. No operating segments have been aggregated to form the above reportable operating segments. The Group primarily provides only one type of service to its microfinance clients being small microfinance loans which are managed under the same ASA Model in all countries. The reportable operating segments have been identified on the basis of organisational overlaps like common Board members, regional management structure and cultural and political similarity due to their geographical proximity to each other. The Executive Committee is the Chief Operating Decision Maker (CODM) and monitors the operating results of its reportable segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operational profits and losses and is measured consistently with profit or loss in the consolidated financial statements. Intercompanies charges between operating and non-operating segments are on normal commercial terms and are based on the Group's service charges framework. Revenues and expenses as well as assets and liabilities of those entities that are not assigned to the four reportable operating segments are reported under 'Non-operating entities'. Inter-segment revenues, expenses and balance sheet items are eliminated on consolidation. No revenue from transactions with a single external customer or counterparty amounted to 10% or more of the Group's total revenue during the period ended 30 June 2025 or 2024. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 38
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 3. SEGMENT INFORMATION (Continued) The following table presents operating income and profit information for the Group's operating segments for the six months ended 30 June 2025. As at 30 June 2025 (Unaudited) West Africa East Africa South Asia South East Asia Non-operating entities Total segments Adjustments and eliminations2 Consolidated USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 External interest and similar income 42,315 46,713 25,591 21,364 107 136,090 - 136,090 Inter-segment interest income - - - - 863 863 (863) - External interest expense (3,487) (9,465) (5,473) (3,563) (2,807) (24,795) - (24,795) Inter-segment interest expense (130) (298) (162) (273) - (863) 863 - Net interest income 38,698 36,950 19,956 17,528 (1,837) 111,295 - 111,295 External other operating income 265 1,746 1,683 2,864 124 6,682 - 6,682 Inter-segment other operating income1 - - - - 38,556 38,556 (38,556) - Other inter-segment expense (188) (3,254) (99) (1,795) 1,829 (3,507) 3,507 - Total operating income 38,775 35,442 21,540 18,597 38,672 153,026 (35,049) 117,977 Credit loss expense (124) (1,086) (346) (1,600) - (3,156) - (3,156) Net operating income 38,651 34,356 21,194 16,997 38,672 149,870 (35,049) 114,821 Personnel expenses (6,723) (11,562) (9,680) (6,854) (3,465) (38,284) - (38,284) Exchange rate differences 74 (393) (72) (11) (133) (535) - (535) Depreciation of property and equipment (332) (272) (418) (191) (41) (1,254) - (1,254) Amortisation of intangible assets - - (118) - (468) (586) - (586) Amortisation of right-of-use assets (378) (662) (393) (657) (87) (2,177) - (2,177) Other operating expenses (3,551) (7,317) (3,277) (5,906) (2,418) (22,469) - (22,469) Loss on net monetary position (1,747) - - - (8) (1,755) - (1,755) Tax expenses (8,815) (5,095) (3,940) (652) (2,474) (20,976) - (20,976) Segment profit 17,179 9,055 3,296 2,726 29,578 61,834 (35,049) 26,785 Total assets 178,647 204,049 135,410 136,041 259,401 913,548 (241,315) 672,233 Total liabilities 101,199 160,927 123,350 118,109 76,406 579,991 (43,921) 536,070 Explanation: Segment profit is net profit after tax 1 Inter-segment operating income includes intercompany dividends, service charge fees and share in results of the subsidiaries. 2 Adjustment and eliminations include eliminations of Inter-segment income, expenses, Investments and borrowings. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 39
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 3. SEGMENT INFORMATION (Continued) The following table present operating income and profit information for the Group's operating segments for the six months ended 30 June 2024. As at 30 June 2024 (Unaudited) West Africa East Africa South Asia South East Asia Non-operating entities Total segments Adjustments and eliminations2 Consolidated USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 External interest and similar income 21,722 33,452 21,658 18,327 10 95,169 - 95,169 Inter-segment interest income - - - - 475 475 (475) - External interest expense (1,084) (7,146) (5,467) (3,211) (3,180) (20,088) - (20,088) Inter-segment interest expense (137) (60) (138) (140) - (475) 475 - Net interest income 20,501 26,246 16,053 14,976 (2,695) 75,081 - 75,081 External other operating income 156 1,738 1,675 3,087 3,035 9,691 - 9,691 Inter-segment other operating income1 - - - - 22,518 22,518 (22,518) - Other inter-segment expense (176) (2,387) (171) (1,631) 1,929 (2,436) 2,436 - Total operating income 20,481 25,597 17,557 16,432 24,787 104,854 (20,082) 84,772 Credit loss expense (309) (458) (791) (807) (5) (2,370) - (2,370) Net operating income 20,172 25,139 16,766 15,625 24,782 102,484 (20,082) 82,402 Personnel expenses (4,051) (8,894) (8,321) (5,936) (3,144) (30,346) - (30,346) Exchange rate differences (340) 81 38 (324) (90) (635) - (635) Depreciation of property and equipment (140) (273) (296) (166) (57) (932) - (932) Amortisation of intangible assets - - (47) - (256) (303) - (303) Amortisation of right-of-use assets (267) (581) (332) (577) (34) (1,791) - (1,791) Other operating expenses (2,620) (4,623) (2,793) (5,411) (2,019) (17,466) - (17,466) Loss on net monetary position (2,554) - - - (27) (2,581) (2,581) Tax expenses (3,989) (4,229) (3,663) (884) (2,102) (14,867) - (14,867) Segment profit 6,211 6,620 1,352 2,327 17,053 33,563 (20,082) 13,481 As at 31 Dec 2024 (Audited) Total assets 101,612 199,377 124,652 125,881 202,947 754,469 (185,967) 568,502 Total liabilities 58,254 159,435 108,451 109,479 58,439 494,058 (22,047) 472,011 Explanation: Segment profit is net profit after tax 1 Inter-segment operating income includes intercompany dividends, service charge fees and share in results of the subsidiaries. 2 Adjustment and eliminations include eliminations of Inter-segment income, expenses, Investments and borrowings. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 40
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 4. INTEREST AND SIMILAR INCOME Notes 2025 2024 USD'000 USD'000 Unaudited Unaudited Interest income calculated using EIR 4.1. 134,279 91,212 Other interest and similar income 4.2. 1,811 3,957 136,090 95,169 4.1. Interest income calculated using EIR 2025 2024 USD'000 USD'000 Unaudited Unaudited Interest income on loans and advances to customers 120,833 83,292 Loan processing fees 13,446 7,920 134,279 91,212 4.2. Other interest and similar income 2025 2024 USD'000 USD'000 Unaudited Unaudited Interest income on short-term deposits 1,625 1,979 Fair value movement of financial assets under FVTPL 59 1,951 Other interest income 127 27 1,811 3,957 5. INTEREST AND SIMILAR EXPENSE 2025 2024 USD'000 USD'000 Unaudited Unaudited Interest expense on debt and other borrowed funds (19,650) (16,394) Interest expense on security deposits and others (3,077) (2,104) Interest expense on lease liabilities (266) (202) Commitment and processing fees (140) (50) (1,662) (1,338) (24,795) (20,088) 6. OTHER OPERATING INCOME 2025 2024 USD'000 USD'000 Unaudited Unaudited Document, application and verification fees 3,485 3,236 Members' admission fees 522 844 Proceeds from sale of pass-books 115 89 Service fees income from off-book BC model (ASA India) 1,113 1,507 Distribution fee from MBA Philippines 652 734 Gain on loan purchase - 3,024 Other 795 257 6,682 9,691 Other includes a number of small items that are smaller than USD 150K on an individual basis. ASA Uganda has entered into an arrangement with Turaco Micro Insurance Company Limited in May 2025, where ASA Uganda acts as an agent on a commission basis. Interest and similar income consists of interest income on microfinance loans to customers, interest income on bank balances and fixed-term deposits. Included in interest and similar expense are accruals for interest payments to customers and other charges from banks. For the six months ended 30 June For the six months ended 30 June For the six months ended 30 June For the six months ended 30 June Amortisation of forward points of forward contracts and currency basis spread of swap contracts For the six months ended 30 June Interest income of loans reclassified to FVTPL for Kenya, Uganda, Sri Lanka and the Philippines has been recognised under fair value movement of financial assets at FVTPL. The entities have stopped to disburse loans with old insurance product. Interest income increased from the first half of last year mostly due to portfolio growth. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 41
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 7. CREDIT LOSS EXPENSES Notes 2025 2024 USD'000 USD'000 Unaudited Unaudited Expected credit loss expense on own portfolio 12.3. (2,782) (2,549) Other expected credit loss (charge)/release (1,185) (1,078) Recovery of previously written off loans 811 1,257 (3,156) (2,370) 8. PERSONNEL EXPENSES Notes 2025 2024 USD'000 USD'000 Unaudited Unaudited Personnel expenses 8.1. (34,692) (27,340) Defined contribution plans (2,572) (2,077) Defined benefit plans (1,020) (929) (38,284) (30,346) No actuarial valuation was done during the period ended 30 June 2025. 8.1. Share based payments Personal expenses includes an amount of USD 229K against share based payment expenses. The Options will normally vest, subject to continued employment, on the following schedule: a) 20% each year between the first and fifth anniversaries of the Grant Date; or b) for Executive Directors only, 60% on the third anniversary and 20% on each of the fourth and fifth anniversaries of Grant Date. Expected volatility (%) 66%, 65% and 81% Risk-free interest rate (%) 3.7%, 5.2% and 5.4% Expected life of share options (years) Ten years Current share price (£) 1.3 Dividend yield (%) 0% The majority of the write-off recovery came from India where significant amount has been written off in prior years. For the six months ended 30 June ASA India, ASA Pakistan, Lak Jaya, Pagasa Philippines, ASA Nigeria, ASA Kenya, ASA Zambia, ASA Sierra Leone and AMSL are maintaining defined benefit pension plans in the form of gratuity plans at retirement, death, incapacitation and termination of employment for eligible employees. The funds for the plans in ASA Pakistan, Pagasa Philippines, Lak Jaya, ASA Nigeria , ASA Kenya, ASA Zambia, ASA Sierra Leone and AMSL are maintained by the entity itself and no plan assets have been established separately. The funds for the plan of ASA India are being maintained with Life Insurance Corporation of India and the entity’s obligation is determined by actuarial valuation. There are no other post-retirement defined benefit plans available to the employees of the Group. In October 2022, July 2023 and July 2024, the Group granted options (‘Options’) for 3.5 million ordinary shares of GBP 0.01 each in the Group Company under its LTIP to certain Executive Directors and other senior staff. The Company’s LTIP is designed to incentivise and retain Directors and senior staff, along with aligning them with shareholders’ interest to create long-term value. Personnel expenses includes base salary of the employees, employer's contribution to the defined contribution and benefit plans and share based payments. To the extent they vest, the Options are exercisable at a price of GBP 0.93, GBP 0.84 and GBP 0.82 per ordinary share for options granted in 2022, 2023 and 2024 respectively, being the average share price for the three business days before the Grant Date. The Group has issued certificates to the participants to the plan. During the half-year of 2025, a total number of 0.07 million (2024: 0.56 million) Options lapsed due to staff leaving the Group. Since the grant dates, 1.07 million option rights have expired because the employees concerned have left the company. The fair value of options granted during the six months ended 30 June 2025 was estimated on the date of grant based on the Black- Scholes model using the following assumptions: Other ECL includes loss allowance provided against the off-book loan portfolio in India and interest & other receivables. The weighted average fair value of the options granted during the six months ended 30 June 2025 was GBP 0.65. ECL expense on own portfolio has been increased mainly due to portfolio growth. The key assumptions applied for the expected credit loss provision and related expense are explained in note 2.3.1. For the six months ended 30 June Number WAEP (in USD) Number WAEP (in USD) Outstanding as at beginning of the period 2,441,350 1.28 2,137,282 1.27 Granted during the period - - 867,372 1.28 Forfeited during the period - - - - Exercised during the period - - - - Expired during the period (73,875) 1.27 (563,304) 1.27 Outstanding as at end of the period 2,367,475 1.28 2,441,350 1.28 Exercisable at end of the period 891,201 1.28 892,195 1.28 HY 2025 2024 ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 42
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 9. OTHER OPERATING EXPENSES Other operating expenses includes the following items: Notes 2025 2024 USD'000 USD'000 Unaudited Unaudited Administrative expenses 9.1. (19,330) (14,775) Professional fees (1,200) (850) Audit fees (1,296) (1,197) International travel (349) (364) Corporate social responsibility expenses (173) (108) Other (121) (172) (22,469) (17,466) 9.1. Administrative expenses 2025 2024 USD'000 USD'000 Unaudited Unaudited Transport and representation expenses (6,015) (5,080) Office expenses (2,867) (2,536) Gas, water and electricity (649) (578) Telecommunications, internet and IT expenses (2,765) (2,211) VAT/ output tax/ service tax (3,803) (2,153) Bank charges (613) (529) Insurance expense (544) (447) Other administrative expenses (2,074) (1,241) (19,330) (14,775) Other administrative expenses includes several small items that are smaller than USD 300K on an individual basis. 10. INCOME TAX AND WITHHOLDING TAX EXPENSE 2025 2024 USD'000 USD'000 Unaudited Unaudited Income tax expense Current income tax (18,744) (11,212) Income tax for previous period (21) (597) Changes in deferred income tax 261 (963) (18,504) (12,772) 10.1. Current tax liability 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Balance as at beginning of the period 14,179 9,326 Tax charge: Current period 18,744 27,477 Previous period 21 2,061 Tax paid (24,839) (24,481) Foreign exchange adjustment (1,442) (204) Balance as at end of the period 6,663 14,179 10.2. Deferred tax assets 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Balance as at beginning of the period 7,277 5,769 Addition/ (utilised) during the period (175) 1,998 Impact of hyperinflation for the period (198) (52) Foreign exchange adjustment (62) (438) Balance as at end of the period 6,842 7,277 For the six months ended 30 June For the six months ended 30 June For the six months ended 30 June Number WAEP (in USD) Number WAEP (in USD) Outstanding as at beginning of the period 2,441,350 1.28 2,137,282 1.27 Granted during the period - - 867,372 1.28 Forfeited during the period - - - - Exercised during the period - - - - Expired during the period (73,875) 1.27 (563,304) 1.27 Outstanding as at end of the period 2,367,475 1.28 2,441,350 1.28 Exercisable at end of the period 891,201 1.28 892,195 1.28 HY 2025 2024 ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 43
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 10. INCOME TAX AND WITHHOLDING TAX EXPENSE (Continued) 10.3. Deferred tax liability 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Balance as at beginning of the period 4,635 2,406 Charge/ (adjustment) during the period 366 2,110 Impact of hyperinflation for the period 207 132 Foreign exchange adjustment 100 (13) Balance as at end of the period 5,308 4,635 10.4. Reconciliation of the total tax charge 2025 2024 USD'000 USD'000 Unaudited Unaudited Accounting result before tax 47,761 28,348 Income tax expense at nominal rate of consolidated entities (15,477) (8,322) Under provision for income tax previous year (21) (715) Movement in unrecognised deferred taxes (1,733) (2,642) Impact of hyperinflation for the period (702) (997) Exempt income 196 336 Other permanent differences (767) (432) Total income tax expense for the period (18,504) (12,772) 10.5. Income tax per region 2025 2024 USD'000 USD'000 Unaudited Unaudited Corporate income tax- West Africa (8,815) (3,989) Corporate income tax- South Asia (3,940) (3,661) Corporate income tax- East Africa (5,095) (4,229) Corporate income tax- South East Asia (641) (873) Corporate income tax- Non operating entities (13) (20) Total income tax per region (18,504) (12,772) 10.6. Withholding tax expense 2025 2024 USD'000 USD'000 Unaudited Unaudited Withholding tax on interest income, dividend, royalties and service fees (2,472) (2,095) Total withholding tax expense (2,472) (2,095) For the six months ended 30 June Deferred tax assets are temporary differences recognised in accordance with local tax regulations and with reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Interest income, dividends, royalties and service fees are subject to withholding tax in certain jurisdictions. The applicable withholding tax rates vary per country and per type of income. This includes an adjustment of deferred withholding tax for undistributed retained earnings. For the six months ended 30 June For the six months ended 30 June ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 44
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 11. 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Cash at bank 85,026 78,906 Cash in hand 776 239 85,802 79,145 12. Notes 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Loans and advances to customers at amortised cost 12.1. 496,045 409,910 Loans and advances to customers at FVTPL 12.6. 37 67 496,082 409,977 12.1. Notes 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Gross loan portfolio 511,003 420,355 Interest receivable on loans to customers 5,600 7,294 Unamortised processing fee (9,359) (7,617) Gross loans 507,244 420,032 Allowance for expected credit loss 12.3. (11,199) (10,122) Net loan portfolio 496,045 409,910 12.2. 12.3. Allowance for expected credit loss Notes 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Balance as at beginning of the period (10,122) (6,912) Credit loss expense on loans and advances to customers 7. (2,782) (6,934) 182 (340) Write-offs of loans and interest 1,880 3,478 Adjustment for interest on stage 3 loans (251) (348) Exchange rate differences (106) 934 Balance as at end of the period (11,199) (10,122) 12.4. The breakdown of the expected credit loss is as follows: 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited ECL on loans and advances (10,722) (9,571) ECL on interest receivable (477) (551) (11,199) (10,122) CASH AT BANK AND IN HAND LOANS AND ADVANCES TO CUSTOMERS The key assumptions applied for the expected credit loss provision are explained in note 2.3.1. ECL for interest receivable on loans from customers The outstanding loans to borrowers under the BC model and DA model which are not recognised on the balance sheet at 30 June 2025 amounted to USD 29.0 million and USD 688K respectively (December 2024: USD 37.3 million and USD 717K). Interest receivable on loans to customers is realisable in line with the loan repayment schedules. Loans and advances to customers are net of allowance for expected credit loss. An amount of USD 27.8 million (2024: USD 28.9 million) of cash at bank is restricted and can not be readily available. Out of this USD 19.6 million (2024: USD 18.4 million) in the Philippines is restricted as per Securities and Exchange Commission regulations as it relates to Loan Collateral Build Up ("LCBU"), the collection of security collateral from clients of a lending company. LCBU is placed into a segregated account. In Tanzania USD 8.2 million (2024: 10.5 million) is restricted and kept in a separate account as per the Bank of Tanzania requirement for non-deposit taking microfinance institutions as it relates to security deposits from clients. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 45
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 12. LOANS AND ADVANCES TO CUSTOMERS (Continued) 12.5. The following tables explain the movement of gross OLP and Interest receivable and related provisions in stages. Management overlay in ECL has been allocated among the stages based on risk. Gross OLP Interest receivable Total ECL Gross OLP Interest receivable Total ECL Gross OLP Interest receivable Total ECL Gross OLP Interest receivable Total ECL At 1 January 2025 408,865 6,465 415,330 (2,207) 2,501 224 2,725 (15) 8,989 605 9,594 (7,900) 420,355 7,294 427,649 (10,122) New assets originated 653,297 - 653,297 - - - - - - - - - 653,297 - 653,297 - Interest revenue - 107,249 107,249 - - 3,237 3,237 - - 10,347 10,347 (251) - 120,833 120,833 (251) Collections (587,522) (108,685) (696,207) - (1,684) (3,365) (5,049) - (3,112) (10,322) (13,434) - (592,318) (122,372) (714,690) - ECL (charges)/releases - - (222) - - 27 - - (2,405) - - - (2,600) Transfers: - - - - - - - - - - - - - Stage 1 to Stage 2 (1,520) (104) (1,624) 9 1,520 104 1,624 (9) - - - - - - - - Stage 1 to Stage 3 (5,070) (13) (5,083) 27 - - - - 5,070 13 5,083 (27) - - - - Stage 2 to Stage 1 5 19 24 - (5) (19) (24) - - - - - - - - - Stage 2 to Stage 3 - - - - (513) (61) (574) 3 513 61 574 (3) - - - - Stage 3 to Stage 1 14 50 64 (52) - - - - (14) (50) (64) 52 - - - - Stage 3 to Stage 2 - - - - 20 1 21 (17) (20) (1) (21) 17 - - - - Write off - - - - - - - - (1,726) (155) (1,881) 1,880 (1,726) (155) (1,881) 1,880 FX impact 31,326 - 31,326 (23) (2) - (2) - 71 - 71 (83) 31,395 - 31,395 (106) At 30 June 2025 499,395 4,981 504,376 (2,468) 1,837 121 1,958 (11) 9,771 498 10,269 (8,720) 511,003 5,600 516,603 (11,199) Unaudited Total USD'000 USD'000 USD'000 USD'000 Stage 1 Stage 2 Stage 3 ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 46
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 12. LOANS AND ADVANCES TO CUSTOMERS (Continued) Gross OLP Interest receivable Total ECL Gross OLP Interest receivable Total ECL Gross OLP Interest receivable Total ECL Gross OLP Interest receivable Total ECL At 1 January 2024 296,875 4,127 301,002 (1,540) 1,911 156 2,067 (12) 6,462 181 6,643 (5,360) 305,248 4,464 309,712 (6,912) New assets originated 1,079,502 - 1,079,502 - - - - - - - - - 1,079,502 - 1,079,502 - Interest revenue - 169,120 169,120 - - 6,079 6,079 - - 12,573 12,573 (348) - 187,772 187,772 (348) Collections (944,794) (165,890) (1,110,684) - (1,180) (6,148) (7,328) - (4,584) (12,596) (17,180) - (950,558) (184,634) (1,135,192) - ECL (charges)/releases - - - (912) - - - 9 - - - (6,371) - - - (7,274) Transfers: - - - - - - - - - - - - - - - - Stage 1 to Stage 2 (2,614) (223) (2,837) 15 2,614 223 2,837 (15) - - - - - - - - Stage 1 to Stage 3 (10,168) (669) (10,837) 55 - - - - 10,168 669 10,837 (55) - - - - Stage 2 to Stage 1 56 - 56 - (56) - (56) - - - - - - - - - Stage 2 to Stage 3 - - - - (668) (86) (754) 4 668 86 754 (4) - - - - Stage 3 to Stage 1 34 - 34 (28) - - - - (34) - (34) 28 - - - - Stage 3 to Stage 2 - - - - 3 - 3 (2) (3) - (3) 2 - - - - Write off - - - - - - - - (3,170) (308) (3,478) 3,478 (3,170) (308) (3,478) 3,478 FX impact (10,026) - (10,026) 203 (123) - (123) 1 (518) - (518) 730 (10,667) - (10,667) 934 At 31 December 2024 408,865 6,465 415,330 (2,207) 2,501 224 2,725 (15) 8,989 605 9,594 (7,900) 420,355 7,294 427,649 (10,122) Audited Total USD'000 USD'000 USD'000 USD'000 Stage 1 Stage 2 Stage 3 ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 47
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 12. LOANS AND ADVANCES TO CUSTOMERS (Continued) 12.6. Loans and advances to customers at FVTPL 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Loans and advances to customers at FVTPL 37 67 37 67 13. DUE FROM BANKS 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Due from banks 25,214 29,263 25,214 29,263 14. 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Balance as at beginning of the period 7,597 7,237 Additions during the period 7,238 2,223 Disposal during the period (3) (72) Depreciation during the period (1,254) (1,915) Impact of hyperinflation for the period 141 478 Adjustment during the period 101 156 Exchange rate differences 1,479 (510) Balance at end of the period 15,299 7,597 15. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Right-of-use assets at the beginning of the period 5,372 4,785 Additions during the period 2,380 3,616 Depreciation during the period (2,177) (3,710) Impact of hyperinflation for the period 251 (17) Exchange rate differences 361 698 Right-of-use assets at the end of the period 6,187 5,372 The Group recognises leased office premises under Right-of-use assets 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Lease liabilities at the beginning of the period - 3,925 3,272 Interest expense on lease liabilities 266 479 Additions of lease liabilities during the period 2,380 3,616 Payment of lease liabilities (2,390) (3,916) Exchange rate differences (39) 474 Lease liabilities at the end of the period 4,142 3,925 Due from banks includes term deposits in different banks. The ASAI entities in in the Philippines, Uganda, Kenya and Sri Lanka have stopped disbursing loans with old insurance product and therefore, the balance of loans and advances at FVTPL reduced. PROPERTY AND EQUIPMENT Capital expenditures for the period are primarily related to acquiring equipment and instaling CBS and DFS infrastructure in Ghana and Tanzania. It also includes capital expenditures related to office equipment, furniture & fixtures, motor cycles etc. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 48
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 16. OTHER ASSETS Other assets comprises of the following: Notes 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Receivables from related parties 16.1. 2,457 1,858 Prepayments 5,417 3,907 Employee advances 3,087 2,844 Advance income tax 2,362 6,884 Security deposit 360 310 Receivables under off-book BC model (ASA India) 16.2. 171 399 Insurance claim receivable 395 317 Interest receivable on due from banks 905 873 Investment in securitised notes 16.3. 2,916 - Other receivables 16.4. 2,061 1,394 20,131 18,786 16.1. Receivables from related parties 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited CMI 58 58 Sequoia BV 9 65 MBA Philippines 1,390 709 CMIS BV - 27 Catalyst Continuity 18 18 Continuity EBT Ltd. 10 9 ASAIG plc EBT 972 972 2,457 1,858 16.2. 16.3. 16.4. 17. DERIVATIVES Notes 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Forward contracts 17.1. 791 - Swap agreements 61 258 Derivative assets total 852 258 Forward contracts 17.1. (676) (1,869) Swap agreements 17.2. (898) (1,383) Derivative liabilities total (1,574) (3,252) Total Derivatives at fair value (722) (2,994) The receivable under off book BC model relates to the various BC partners of ASA India. The receivables from related parties are short term in nature and do not accrue interest. ASAI NV has purchased securitised notes linked to the non-convertible debentures (NCDs) issued by ASA India amounting to USD 11.0 million from a fund managed by Symbiotics at a settlement value of USD 2.9 million. The securitised notes purchased are issued by a fund managed by Symbiotics and relate to investments in two Luxemburg based Securities Purchase Vehicles named Masala Investments Sarl and AAV Sarl that serve as pass-through entities which purchased the NCDs issued by ASA India. Other receivables includes various advances in relation to employee's insurance, receivable from VAT and service tax authorities. Individually none of the advances are over USD 500K. Prepayments and employee advances are in line with security against housing contracts, funding agreements and employee receivables. Advance income tax will be set off against current tax payable after completion of the tax assessment. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 49
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 17. DERIVATIVES (Continued) 17.1. The Group is holding the following foreign exchange forward contracts: 17.2. The Group also holds the below swap contracts: 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Cross-currency interest rate swap- Notional Value 19,436 17,031 Cross-currency interest rate swap- Carrying amount (837) (1,125) The applied valuation techniques include forward pricing and swap models, using present value calculations by estimating future cash flows using future exchange rates and discounting them with the appropriate interest rate curves. These derivative contracts are classified as Level 2 financial instruments. As of 30 June 2025 <30 days 1-3 months 3-12 months >12 months Total USD'000 USD'000 USD'000 USD'000 USD'000 Pakistan Notional amount - - 14,000 - 14,000 Average forward rate (USD/PKR) - - 296 - 296 Carrying amount (in USD) - - 651 - 651 Sierra Leone Notional amount (in USD) - - 1,000 500 1,500 Average forward rate (USD/SLE) - - 31 27 29 Carrying amount (in USD) - - (173) (45) (218) Zambia Notional amount (in USD) - - 500 1,350 1,850 Average forward rate (USD/ZMW) - - 31 33 32 Carrying amount (in USD) - - (99) (244) (343) Kenya Notional amount - - 10,000 - 10,000 Average forward rate (USD/KES) - - 144 - 144 Carrying amount (in USD) - - (65) - (65) Tanzania Notional amount - - 2,500 2,500 5,000 Average forward rate (USD/TZS) - - 2,893 3,018 2,955 Carrying amount (in USD) - - (31) (12) (43) Uganda Notional amount - - 500 1,500 2,000 Average forward rate (USD/PKR) - - 3,762 3,901 3,866 Carrying amount (in USD) - - 11 58 69 ASAI NV Notional amount (in USD) - - 964 - 964 Average forward rate (USD/INR) - - 92 - 92 Carrying amount (in USD) - - (7) - (7) ASAIH Notional amount (in USD) - - 4,751 - 4,751 Average forward rate (USD/PKR) - - 292 - 292 Carrying amount (in USD) - - 71 - 71 Unaudited Maturity As of 31 December 2024 <30 days 1-3 months 3-12 months >12 months Total USD'000 USD'000 USD'000 USD'000 USD'000 Pakistan Notional amount (in USD) - 519 21,500 - 22,019 Average forward rate (USD/PKR) - 324 310 - 312 Carrying amount (in USD) - (74) (1,551) - (1,625) Sierra Leone Notional amount (in USD) - - - 1,000 1,000 Average forward rate (USD/SLE) - - - 31 31 Carrying amount (in USD) - - - (127) (127) Zambia Notional amount (in USD) - - 750 500 1,250 Average forward rate (USD/ZMW) - - 30 35 32 Carrying amount (in USD) - - (17) (42) (59) Kenya Notional amount (in USD) - - 1,000 - 1,000 Average forward rate (USD/KES) - - 144 - 144 Carrying amount (in USD) - - (28) - (28) ASAI NV Notional amount (in USD) - - - 965 965 Average forward rate (USD/INR) - - - 92 92 Carrying amount (in USD) - - - (30) (30) Audited Maturity ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 50
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 18. 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Balance as at beginning of the period 10,512 7,340 Additions during the period 3,103 3,918 Amortisation during the period (586) (857) Impact of hyperinflation for the period 301 332 Exchange rate differences 2,149 (221) Balance at end of the period 15,479 10,512 19. ISSUED CAPITAL 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited ASA International Group plc issued 100 million shares of GBP 0.01 each 1,310 1,310 1,310 1,310 20. RETAINED EARNINGS Total retained earnings are calculated as follows: 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Balance at the beginning of the period 212,102 185,864 Dividend (4,034) (2,952) Transferred to NCI and others - (59) Result for the period 27,104 29,249 Balance at the end of the period 235,172 212,102 Profit for the period Attributable to equity holders of the parent 27,104 29,249 Non-controlling interest (319) (716) 26,785 28,533 Addition of intangible assets includes the development and implementation costs for the project to develop a digital financial services (DFS) platform. The implementation is currently in progress in Ghana and Tanzania. For the introduction of current accounts and savings and deposits accounts and other digital services to the clients, the Group decided to add a Core Banking System (CBS) to its IT infrastructure. The Group has procured a ten-year licence to the Temenos Financial Inclusion suite, which is an off-the-shelf CBS system. In 2024, clients in Pakistan were migrated from the incumbent loan system to the Temenos Core Banking System. Implementation of the CBS in Ghana and Tanzania is in progress alongside the DFS. INTANGIBLE ASSETS Total spent during the period against DFS and CBS are as follows: Part of retained earnings relates to NGOs which are consolidated in these financial statements. The retained earnings of these NGOs cannot be distributed to their respective members. Retained earnings relating to NGOs amounted to USD 2.2 million at 30 June 2025 (December 2024: USD 2.3 million). ASA S&L, ASA India and ASA Nigeria and ASAI NV have statutory requirements to add a percentage of the net profits to a legal reserve. Therefore, part of retained earnings cannot be distributed to shareholders. Retained earnings relating to these legal reserves amounted to USD 33.0 million at 30 June 2025 (December 2024: USD 24.8 million). Particulars Capitalised Charged to P&L Total Capitalised Charged to P&L Total Development fees 460 - 460 828 - 828 License fees 1,777 208 1,985 697 384 1,081 Implementation cost 588 - 588 2,004 39 2,043 Consultancy 1 - 1 17 - 17 Salary and other benefits 277 - 277 372 16 388 3,103 208 3,311 3,918 439 4,357 30 June 2025 31 December 2024 USD'000 USD'000 ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 51
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 21. FOREIGN CURRENCY TRANSLATION RESERVE 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Balance at the beginning of the period (116,311) (111,998) Translation of assets and liabilities of subsidiaries to USD 15,518 (4,313) Balance at the end of the period (100,793) (116,311) 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Ghana 16,818 (1,087) Nigeria 42 (5,819) Tanzania (1,574) 889 Philippines 407 (559) Myanmar - 5 Kenya 9 1,524 Pakistan (683) 138 Sri Lanka (25) 126 Sierra Leone 29 127 Zambia 377 (163) Others 118 506 15,518 (4,313) 22. Notes 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Debt issued and other borrowed funds by operating subsidiaries 274,788 249,804 Symbiotic-managed funds (ASAI NV) 22.2. 750 1,500 FMO (ASAI NV) 22.3. 12,000 - BIO (ASAIH) 22.5. 7,500 10,000 OeEB (ASAI NV) 22.6. 15,000 16,875 Oikocredit (ASAI NV) 22.7. 7,500 5,000 Ninety one (ASAI NV) 7,500 10,000 responsAbility (ASAI NV) 1,501 4,500 DFC (ASAI NV) 15,000 15,000 Interest payable on third-party loans 9,061 8,171 350,600 320,850 22.1 Debt issued and borrowed funds linked with covenants 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Principal outstanding debt issued and borrowed funds 341,539 312,679 Principal outstanding debt issued and borrowed funds linked with covenants 240,147 192,472 % of debts linked with covenants 70.3% 61.6% The significant strengthening of the Ghanaian Cedi by the end of June 2025 resulted in a positive impact in the foreign currency translation reserve for the period. The translation of the Company’s subsidiaries from local currency into the Company’s presentation currency (USD) results in the following currency translation differences that effects the equity in USD terms: The country-wise breakdown of translation adjustment is as follows: DEBT ISSUED AND OTHER BORROWED FUNDS Most of the loan agreements are subject to covenant clauses, whereby the subsidiary is required to meet certain key financial ratios. Some subsidiaries did not fulfil some of the ratios as required in agreements. As of 30 June 2025, out of the total outstanding debt of USD 341.5 million (2024: USD 312.7 million), the balance for credit lines with breached covenants that did not have waivers amounted to USD 1.4 million (2024: USD 11.3 million) on balance sheet date. The Group had waiver of USD 16.7 million on the balance sheet date and no waivers have been received subsequently (2024: USD 0.7 million), but for a period not covering the whole loan or going concern period. Due to these breaches of covenant clauses, the lenders are contractually entitled to request for immediate repayment of the outstanding loan amounts. The outstanding balance is presented as on demand as at 30 June 2025. The lenders have not requested any early repayment of loans as of the date when these financial statements were approved by the Board of Directors. Debt issued and borrowed funds increased primarily in ASA Pakistan, ASA Ghana, and ASA Tanzania, driven by business expansion and currency appreciation in Ghana. The Group has 53 lenders and various covenants were agreed. The main covenants include capital adequacy ratio (CAR), liquidity ratio, cost-to-income ratio, solvency ratio, loan portfolio quality ratio, debt to equity ratio, return on assets (‘ROA’), current ratio etc. As at 30 June 2025, 70.3% (31 December 2024: 61.6%) of outstanding debts are linked with covenants. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 52
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 23. DUE TO CUSTOMERS 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited 98,459 74,470 Client's voluntary savings 21,115 15,668 Interest payable on deposits and savings 778 33 120,352 90,171 24. OTHER LIABILITIES Other liabilities are as follows: Notes 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Taxes payable, other than corporate income tax 8,237 7,722 Security deposits 2,825 2,552 Other deposits 690 604 Accrued expenses 983 919 Accrued audit fees 1,359 1,432 Amount due to employees 3,438 2,594 Amount due to related parties 24.1. 2,403 77 Liabilities under on-book and off-book BC model (ASAI India) 5,807 4,943 Industrial Training fund 30 21 Payable to Temenos and service providers 1,544 697 Social welfare fund 658 548 Other liabilities 24.2. 9,355 3,830 37,329 25,939 24.1. Amount due to related parties 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited CMI 1 1 Sequoia BV 5 4 MBA Philippines 2,387 66 CMIC 8 6 CIMS BV 2 - 2,403 77 24.2. 25. PROVISIONS 30 June 2025 31 December 2024 USD'000 USD'000 Unaudited Audited Provision for financial guarantees under off-book BC model (ASA India) 2,671 2,204 2,671 2,204 Security deposits mainly relate to deposits taken from employees as a form of security. Other deposits relate to various smaller deposits in different countries. Client's security deposits Clients can deposit voluntary savings in Ghana, Nigeria, Rwanda and Myanmar. Other liabilities include various smaller accruals and provisions for various entities in the Company. Other liabilities as of 30 June 2025 also includes USD 4.5m of amount due to clients in Ghana and USD 1.1m advance collection from client in Pakistan. Clients of the Company’s subsidiaries contribute to a "security deposit fund". These deposits can be withdrawn partly by clients but not in the full amount unless the client has fully repaid the outstanding loan balance. This includes ECL provision against the off-book BC portfolio in India. For details on the Group’s ECL policy see note 2.3.1. Liabilities under on-book and off-book BC model includes amounts collected from BC clients but yet not transferred to the BC partners. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 53
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 26. ADDITIONAL CASH FLOW INFORMATION 26.1. Changes in operating assets 2025 2024 USD'000 USD'000 Unaudited Unaudited Movement in loans and advances to customers (59,745) (33,528) Movement in due from banks 4,303 (7,374) Movement in right-of-use assets (2,380) (2,092) Other assets excluding income tax advances (5,295) 934 (63,117) (42,060) 26.2. Changes in operating liabilities 2025 2024 USD'000 USD'000 Unaudited Unaudited Due to customers 13,669 9,004 Other liabilities 3,229 6,280 Retirement benefit (318) (358) Movement in lease liability 2,380 2,092 Movement in provisions 467 819 19,427 17,837 26.3. Non-cash items included in the statement of comprehensive income 2025 2024 USD'000 USD'000 Unaudited Unaudited Depreciation on: - Property and equipment 1,840 1,235 - Right-of-use assets 2,177 1,791 Interest expense on lease liability 266 202 Credit loss expense 3,156 2,370 Write-offs 1,880 715 Fair value movement of forward contracts (674) 2,121 Fair value movement of loans at FVTPL - 1,999 Share-based payments 229 428 Charge against defined benefit plans 1,020 929 Foreign exchange result 535 635 Loss on net monetary position 1,755 2,581 12,184 15,006 For the six month ended 30 June For the six month ended 30 June For the six month ended 30 June ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 54
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 27. RISK MANAGEMENT 27.1 General The Group continuously enhances its risk management framework to keep pace with emerging challenges and to support the long-term stability of the institution. Operating in the microfinance sector, the Group maintains a cautious and consistent strategy for managing risks. Its risk culture is driven by its fundamental values, shared beliefs, collective knowledge, and overall awareness of risk throughout its various operations. The Group assesses its risk environment by identifying and analyzing both measurable and non-measurable risks, which are then integrated into its management practices and decision-making processes. 27.2 Risk management structure ASA International has established a comprehensive and structured risk management framework to ensure the effective identification, assessment, mitigation, and monitoring of risks across its operations. This framework supports the Group’s goal of maintaining financial stability, operational efficiency, and strong governance as a microfinance institution operating in emerging markets. At the subsidiary level, the Risk Management Unit plays a central role in identifying both existing and emerging risks on an ongoing basis. This unit works closely with risk owners to implement mitigation strategies and continuously monitor the risk environment. Risk reports generated at the subsidiary level are reviewed by the Risk Management Coordination Committee and approved by the subsidiary CEO. These reports are then submitted to the subsidiary-level Audit and Risk Committee (ARC) for further oversight. Consolidated country-level risk reports are prepared by the Group Risk Management team to form a comprehensive Group risk report, which is reviewed by the Group Executive Committee before being presented to the Group ARC for thorough evaluation and further recommendations. The Group’s risk appetite defines the amount and type of risk it is willing to accept in pursuit of its strategic objectives. ASA International adopts a moderate risk appetite, reflecting its focus on balancing growth with risk control. The Group aims to avoid material losses, operational inefficiencies, and fraud, while ensuring compliance with all legal and regulatory requirements. It follows zero tolerance for unethical, illegal, or unprofessional conduct. The risk appetite benchmarks are reviewed quarterly through a detailed report built around Key Risk Indicators (KRIs), which assigns tolerance levels based on regulatory expectations, past trends, and forward-looking business projections. These levels are reviewed and updated as necessary, based on inputs from the Executive Committee, Asset and Liability Committee (ALCO), or the ARC. This ensures that the Group’s risk appetite remains flexible and responsive to changing conditions ASA International’s risk governance follows a “Three Lines of Defence” model. The first line consists of operational staff, such as loan officers and branch managers, who manage day-to-day risks. The second line includes oversight functions like Risk Management, Compliance, and the Fraud and Misappropriation Prevention Unit. The third line is the Internal Audit function at both Group and subsidiary levels, which independently reviews the effectiveness of all risk management activities. This layered approach ensures accountability, transparency, and resilience across the Group. Risks are also mitigated through standardized practices that are part of the ASA Model of microfinance. These include: • Through new client assessment/KYC. • Standardised loan products. • Frequent client interactions through weekly collections. • Individual loan given in a group setting. • Loan is protected by guarantor. • Zero-tolerance on the late deposit of loan instalments for loan officers. • Loans granted primarily for income-generating activities. • Full repayment before eligibility for new loans. • Ongoing assessment of client needs, benefits and satisfaction. 27.3 Risk Management The Group’s key risk management areas are strategic risk, operational risk, IT risk, finance risk, and legal & compliance risk. Strategic risk Under strategic risk, the Group faces several key challenges. The primary focus is on how to sustainably grow its portfolio, digitalise, enhance service quality, and increase earnings particularly in the context of emerging economies. This also includes upholding the Company’s reputation and strengthening its competitive advantages. Climate strategy is also a critical component, as the Group is committed to controlling its greenhouse gas (‘GHG’) emissions and mitigating the adverse impacts of climate change on its operations. Given the prevalence of extreme weather events in some of the countries where the Group operates, disaster management is meticulously considered to ensure resilience and continuity. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 55
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 27. RISK MANAGEMENT (Continued) 27.3 Risk Management (Continued) Operational risk Operational risk encompasses several critical areas essential to the Company’s success. Human resources play a pivotal role, with training, development and staff retention being vital for effective operations. The Company prioritises providing industry- standard compensation packages and clear career paths to employees, ensuring their motivation and commitment. Maintaining the health and safety of staff is also a top priority, reflecting the Company’s commitment to a supportive and secure working environment. Preventing fraud and misappropriation is another significant aspect of operational risk management, given the occasional occurrence of such incidents. The Company employs stringent measures to safeguard against these risks, recognising their potential impact on the business. Additionally, ensuring business continuity is crucial, as unforeseen situations can arise. IT risk Information & technology risk encompasses several critical components, including business continuity, which includes ensuring server redundancy, disaster recovery sites, and swift restoration in the event of incidents. Reducing system vulnerability to protect against cyber risks remains a top priority, with robust measures in place to safeguard data privacy. Data is secured through password protection and is accessible only to authorised users, ensuring confidentiality and integrity. Prompt resolution of IT issues by the central IT team is crucial for maintaining smooth operational workflows. To prevent data loss during data migration projects, comprehensive precautions are taken. Additionally, an audit trail is maintained to facilitate the investigation of any digital fraud incidents. Through these rigorous processes, the Company ensures robust IT risk management, safeguarding its technological infrastructure and data assets. Finance risk Under financial risk management, maintaining low credit risk is a top priority. The Group ensures the high quality of its portfolio through rigorous client assessments, robust weekly collection efforts, and continuous evaluations of client’s ability to pay. To manage liquidity risk, the Group remains well funded, and has strong access to a diverse range of funding sources at both the local and holding levels. The Company maintains solid relationships with its debt providers, who continue to show strong interest in funding its operations. The Group manages currency risk by predominantly securing funding in local currencies and matching local currency assets with local currency liabilities at its microfinance subsidiaries. For foreign currency funding, the Company ensures that nearly 100% of its currency exposure is hedged. While the Group is exposed to inflation rate changes in certain regions, its diversified operations across thirteen jurisdictions help reduce this exposure. To manage interest rate risk, the Group conducts a cost of funds analysis and monitors interest rates in countries where interest rate caps are imposed. Interest rate risk is typically lower in microfinance companies due to their short-term and fixed-rate loans. The Group also implements a policy on concentration risk, monitoring portfolio concentration to encourage a well-diversified portfolio across different geographical regions, thereby limiting exposure to adverse country specific economic events. The Group ensures tax compliance by engaging competent external tax advisers at the entity level and ensuring full compliance with all applicable tax laws in the jurisdictions where it operates. Legal and Compliance risk Compliance with local regulations is a top priority for the Group. The Group ensures adherence to all local laws and regulations, including central bank requirements and assessments along with its implementation. Except for the Philippines, all entities are regulated by their respective central banks. Operating within a stringent regulatory environment encourages robust internal controls within the Group. While the overall risk of anti-money laundering (‘AML’) is low in microfinance due to the small loan sizes, the Group manages AML risks through adequate Know Your Customer (‘KYC’) policies, continuous supervision of client behaviour, and rigorous implementation of AML policies and procedures. Additionally, the Group is committed to upholding client protection principles, ensuring that the clients are treated fairly and their complaints are addressed and resolved promptly. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 56
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 27. RISK MANAGEMENT (Continued) 27.4 Financial risk 27.4.1 Credit risk Credit risk is the risk that the Group will incur a loss because its customers, clients or counterparties failed to discharge their contractual obligations. The Group manages and controls credit risk by adhering strictly to the operating procedures set forth in the operational manual which includes setting limits on the amount of risk it is willing to accept for individual counterparties and for geographical concentrations, and by monitoring exposures in relation to such limits. Maximum exposure to credit risk The maximum credit exposure is equal to the carrying amounts of the financial instruments on the Group’s statement of financial position except the off book BC portfolio where the risk is determined as per the contract with BC partners. As mentioned above, the Group reduces its concentration risk by ensuring a widely diverse portfolio, distributed amongst various countries and continents. At present the Group invests in West Africa, East Africa, South Asia and South East Asia. Customer security deposits are cash collateral and are presented as part of Due to customers in the statement of financial position. These security deposits are considered as collateral for the loans to customers and therefore reduce the credit risk on these loans. There are no significant concentrations of credit risk through exposures to individual customers, specific industry/sectors. However, Pakistan holds 18% of the Group's credit exposure in June 2025 (2024: 20%). Management regularly monitors the concentration risk and manages loan distribution if required. The Group provides direct lending to customers through its subsidiaries. In addition, the Group accepts savings in the entities where it has a deposit taking license. Credit risk from lending as at 30 June 2025. Credit risk from lending as at 31 December 2024. Total lending Stage 1 Stage 2 Stage 3 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 West Africa 2,321 153,297 155,618 151,314 384 1,599 East Africa 12,760 162,396 175,156 159,400 689 2,307 South Asia 5,371 103,321 108,692 101,565 364 1,392 South East Asia 4,762 97,589 102,351 92,097 521 4,971 Non-operating entities - - - - - - Total 25,214 516,603 541,817 504,376 1,958 10,269 ECL provision (11,199) (11,199) (2,468) (11) (8,720) Coverage ratio 3 2.2% 2.1% 0.5% 0.6% 84.9% 1 Due from banks are neither past due nor credit impaired. 2 Includes interest receivable. 3 Coverage ratio is calculated as the total ECL provision divided by the underlying assets' gross carrying amount. Unaudited Total direct lending/IFRS 9 stages Gross loans and advances to customer at amortised cost 2 Due from banks1 Total lending Stage 1 Stage 2 Stage 3 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 West Africa 2,625 86,788 89,413 84,953 326 1,509 East Africa 16,630 151,512 168,142 149,422 393 1,697 South Asia 5,246 99,728 104,974 97,077 314 2,337 South East Asia 4,762 89,621 94,383 83,878 1,692 4,051 Non-operating entities - - - - - - Total 29,263 427,649 456,912 415,330 2,725 9,594 ECL provision - (10,122) (10,122) (2,207) (15) (7,900) Coverage ratio 3 2.4% 2.2% 0.5% 0.6% 82.3% 1 Due from banks are neither past due nor credit impaired. 2 Includes interest receivable. 3 Coverage ratio is calculated as the total ECL provision divided by the underlying assets' gross carrying amount. Audited Total direct lending/IFRS 9 stages Gross loans and advances to customer at amortised cost 2 Due from banks1 ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 57
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 26.4.1 Credit risk (continued) Credit risk from lending as at 30 June 2025 Credit risk from lending as at 31 December 2024 27. RISK MANAGEMENT (Continued) 27.4 Financial risk (continued) 27.4.2 Liquidity risk Liquidity risk is the risk that the Company will be unable to meet its payment obligations when they fall due under normal and stress circumstances. Most subsidiaries of ASAIG are now able to attract third-party funding and various local currency and USD loans are in place. Liquidity management is evaluated at the MFI level and on a consolidated Group basis. Each of the Group’s MFIs are required to meet the financial obligations of their internal and external stakeholders. Failure to manage liquidity risks may cause the Group to lose business, miss opportunities for growth, or experience legal or reputational consequences. To mitigate its liquidity management risk, the Group has established liquidity management policies, published in its operation manual, finance manual and its treasury manual. The Group is confident it will be able to meet the payment obligations under the aforementioned loans for various reasons, including but not limited to: • The main class of assets is loans to customers. Due to the nature of the microfinance business the Group is engaged in, these loans to customers have short-term maturities, hence the Group is in a position to generate a constant stream of cash inflows. • The Group is in the position to accumulate sufficient funds to cover its obligations, although this may entail limitations on new loan disbursements. • The Group has been able to receive most of the waivers against covenant breaches from the lenders and no indication received from lenders for any early repayment. As at 30 June 2025, the Group has USD 85.8 million (2024: USD 79.1 million) of cash at bank and in hand. An amount of USD 27.8 million (2024: USD 28.9 million) is restricted and can not be readily available. The remaining USD 58.0 million (2024: USD 50.2 million) is unrestricted and for operational needs. The Group is able to fund its operations and budgeted growth of its loan portfolio from new loan facilities supplied by third parties, security collateral and/or savings provided by its clients, and internally generated cash flows. The table below shows cash flow analysis of liabilities according to when they are expected to be recovered or to be settled. Liabilities As at 30 June 2025 On demand <3 months 3-12 months Sub-total 1-12 months 1-5 years Over 5 years Sub-total >12 months No fixed maturity Total USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 Debt issued and other borrowed funds 4,881 1 59,991 88,803 153,675 196,925 - 196,925 - 350,600 Due to customers 12,503 51,961 55,775 120,239 113 - 113 - 120,352 Lease liability - 15 535 550 3,522 70 3,592 - 4,142 Derivative liabilities - 347 1,212 1,559 15 - 15 - 1,574 Other liabilities 4,932 10,024 14,079 29,035 2,055 - 2,055 6,239 37,329 Provisions - - 2,671 2,671 - - - - 2,671 22,316 122,338 163,075 307,729 202,630 70 202,700 6,239 516,668 1 Unaudited This includes loans amounting to USD 1.4 million on which waivers had not been received at the balance sheet date. No waivers have been received for those loans subsequently. It also includes a mature loan in India amounting to USD 2.9 million which was not repaid by the balance sheet date. Liabilities As at 31 December 2024 On demand <3 months 3-12 months Sub-total 1-12 months 1-5 years Over 5 years Sub-total >12 months No fixed maturity Total USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 Debt issued and other borrowed funds 12,579 1 45,193 99,006 156,778 164,072 - 164,072 - 320,850 Due to customers 17,941 32,553 39,643 90,137 34 - 34 - 90,171 Lease liability - 19 411 430 3,394 101 3,495 - 3,925 Derivative liabilities - 473 2,921 3,394 (142) - (142) - 3,252 Other liabilities 4,225 5,310 8,899 18,434 2,460 - 2,460 5,045 25,939 Provisions - - 2,204 2,204 - - - - 2,204 34,745 83,548 153,084 271,377 169,818 101 169,919 5,045 446,341 1 Audited This includes loans amounting to USD 11.3 million on which waivers had not been received at the balancesheet date. Subsequently waivers for breached loans amounting to USD 0.7 million have been received. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 58
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 27. RISK MANAGEMENT (Continued) 27.4 Financial risk (continued) 27.4.2 Liquidity risk (continued) The table below shows undiscounted cash flow analysis of assets according to when they are expected to be realised or to be settled. Changes in liabilities arising from financing activities Assets As at 31 December 2024 On demand <3 months 3-12 months Sub-total 1-12 months 1-5 years Over 5 years Sub-total >12 months No fixed maturity Total USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 Cash at bank and in hand 50,245 - 28,900 79,145 - - - - 79,145 Loans and advances to customers 10,141 196,211 203,417 409,769 208 - 208 - 409,977 Due from banks - 2,156 12,755 14,911 14,352 - 14,352 - 29,263 Equity investments at FVOCI - - - - - - - 315 315 Derivative assets - 258 - 258 - - - - 258 Other assets - 3,637 13,383 17,020 1,766 - 1,766 - 18,786 60,386 202,262 258,455 521,103 16,326 - 16,326 315 537,744 Audited Assets As at 30 June 2025 On demand <3 months 3-12 months Sub-total 1-12 months 1-5 years Over 5 years Sub-total >12 months No fixed maturity Total USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 Cash at bank and in hand 58,001 - 27,801 85,802 - - - - 85,802 Loans and advances to customers 8,175 269,902 217,559 495,636 446 - 446 - 496,082 Due from banks - 1,488 12,036 13,524 11,690 - 11,690 - 25,214 Equity investments at FVOCI - - - - - - - 345 345 Derivative assets - - 852 852 - - - - 852 Other assets - 3,950 14,868 18,818 1,313 - 1,313 - 20,131 66,176 275,340 273,116 614,632 13,449 - 13,449 345 628,426 Unaudited For the six month ended 30 June 2025 1 January Cash flows Non cash movement Foreign exchange movement 30 June USD'000 USD'000 USD'000 USD'000 USD'000 Debt issued and borrowed funds 320,850 28,784 - 966 350,600 Lease liabilities 3,925 (2,390) 2,646 (39) 4,142 Total liabilities from financing activities 324,775 26,394 2,646 927 354,742 For the year ended 31 December 2024 1 January Cash flows Non cash movement Foreign exchange movement 31 December USD'000 USD'000 USD'000 USD'000 USD'000 Debt issued and borrowed funds 273,411 41,783 - 5,656 320,850 Lease liabilities 3,272 (3,916) 4,095 474 3,925 Total liabilities from financing activities 276,683 37,867 4,095 6,130 324,775 Unaudited Audited ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 59
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 LIBOR based loans as of June 23 (maturing after June 23) BIO OeEB Symbio Pak 27. RISK MANAGEMENT (Continued) 27.4 Financial risk (continued) 27.4.3 Foreign exchange rate risk Currency risk is the possibility of financial loss to the Group arising from adverse movements in foreign exchange rates. Currency risk is a substantial risk for the Group, as most loans to MFIs and borrowers are in local currency in countries where currency depreciation against the USD is often considered less predictable. At present the Group manages currency risk mainly through natural hedging, i.e. by matching the MFI’s loca currency assets consisting of the MFI’s loan portfolio with local currency liabilities. The Group’s risk policy allows the Group treasurer the possibility of hedging with instruments such as swaps and forward contracts if and when appropriate. In order to mitigate the foreign exchange risk on foreign currency loans, ASA Pakistan, ASA Myanmar, ASA Sierra Leone, ASA Kenya, ASA Tanzania and ASA Zambia have entered into hedging agreements. Th Group applies hedge accounting to the foreign currency loans and related hedge contracts. While the Group faces significant translation exposure on its equity investments in local MFIs (as the functional currency of the Group is USD), the Group has implemented an equity hedging policy. The policy entails a frequent review of expected currency devaluations compared to the costs for equity hedging instruments. The Group has not used equity hedging instruments in 2025. In addition the Group has a policy to distribute excess retained earnings at its subsidiaries to the holding entities while maintaining a sufficient capital adequacy ratio. In summary, the Group takes a number of measures to manage its foreign currency exposure: • Investments are only made in countries that show a reasonable level of macroeconomic stability. A detailed macroeconomic and socio- political assessment is carried out before the Group decides to invest in certain country. • Excess retained earnings in the operating entities are distributed to the holding entities. Equity hedgin instruments are considered as part of the equity hedging policy. • The Group endeavours to procure its MFIs to secure local currency loans (instead of foreign currency loans) to the extent possible or deemed commercially advantageous. • The Group applies hedging instruments on foreign currency loans in any of its operating and holding entities. 27.4.4 Interest rate risk Interest rate risk is the risk that profitability is affected by fluctuations in interest rates. The greatest interest rate risk the Group experiences occurs when the cost of funds increases faster than the Group can or is willing to adjust its lending rates. The Group’s strategy in evaluating and managing its interest rate risk is to consider any risk at the pre-investment stage, to conduct a cost of funds analysis and to consider interest rates in particular, where there is a limit on the amount of interest it may charge, such as in Myanmar and Tanzania. The credit methodology of the MFIs determines that loans to microfinance clients have short-term maturities of less than one year and at fixed interest rates. Third-party loans to MFIs, sourced from both local and international financial institutions, mostly have relatively short terms between one and three years. 37% (2024: 33%) of the consolidated debt has variable interest rates. Depending on the extent of the exposure and hedging possibilities with regard to the availability of hedging instruments and related pricing, the Group might actively hedge its positions to safeguard the Group's profits and to reduce the volatility of interest rates by using forwards, futures and interest rate swaps. The very short tenor of the loans provided to microfinance dampens the effect of interest rate fluctuations. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 60
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 46.9 28. COMMITMENTS The Group agreed certain commitments to BC Partners under the BC model in ASA India. Reference is made to note 12. As per the current model ASA India holds 5% risk on the portfolio managed on behalf of IDFC. As of 30 June 2025, the risk of the Group on such BC portfolio stands at USD 0.3 million (2024: USD 0.3 million). 29. RELATED PARTY DISCLOSURES 29.1 Key management personnel The Dhaka office is managed by a team of experienced microfinance experts who have many years of expertise in managing and supporting MFIs across Asia and Africa. In addition to supervising the performance of the Group’s local MFIs, executive management in Dhaka is primarily responsible for finance and accounts (including the Chief Financial Officer), risk management, audit, IT, human resource management, and corporate secretarial functions for the Group. All key management personnel stationed in Dhaka are on the payroll of ASAI NV. The Amsterdam office comprises key management personnel who provides support on treasury, investor relations, legal, specialised accounting support and the management of business development projects. They are on the payroll of ASAI NV. The experienced CEO’s who are deployed in the countries are part of key management personnel. They are paid by their respective entities. The Group CEO (based in Amsterdam) is a member of the Board and paid by ASA International Group plc. Remuneration of Directors During the first half of 2025, the Directors of the Company received total compensation of USD 589K (HY 2024: USD 379K). Total remuneration to key management personnel of the Company Total remuneration takes the form of short-term employee benefits. In the first half of 2025, total remuneration amounted to USD 1.2 million (HY 2024: USD 1.1 million). No retirement benefits are accruing to Directors under defined benefit schemes. The aggregate of emoluments and amounts receivable under incentive schemes of the highest paid Director during the period was EUR 185K. 29.2 Reporting dates of subsidiaries All of the Company's subsidiaries have reporting dates of 31 December, with the exception of ASA India, ASA Myanmar, Pinoy, Pagasa Consultancy (where the market standard reporting date is 31 March). All the subsidiaries have provided financial statements for this consolidation purposes for the six month period ended 30 June. 29.3 Relationship agreement Relationship agreement with the Controlling Shareholder Group The Company, its founders and Catalyst Continuity (jointly the “Controlling Shareholders”) have entered into a relationship agreement in 2018 (the 'Relationship Agreement'), the principal purpose of which is to ensure that the Company will be able, at all times, to carry out its business independently of the members of the Controlling Shareholder Group and their respective associates. The Relationship Agreement contains undertakings from each of the members of the Controlling Shareholder Group that (i) transactions and relationships with it and its associates will be conducted on normal commercial terms, (ii) neither it nor any of its associates will take any action that would have the effect of preventing the Company from complying with its obligations under the Listing Rules, and (iii) neither it nor any of its associates will propose or procure the proposal of a shareholder resolution which is intended or appears to be intended to circumvent the proper application of the Listing Rules. The Relationship Agreements also sets forth the conditions for appointment of Non-Executive Directors by Controlling Shareholders. For so long as the Company has a controlling shareholder, the UK Listing Rules require the election of any independent Director to be approved by majority votes of both (i) the shareholders as a whole and (ii) the shareholders excluding any controlling shareholder. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 61
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 342.4657534 29. RELATED PARTY DISCLOSURES (Continued) 29.4 Other related parties A list of related parties with which ASA International has transactions is presented below. The transactions in for six month ended 30 June 2025 and year end 31 December 2024 and the balances as at 30 June 2025 and 31 December 2024 with related parties are presented in the notes below. Name of related party Relationship CMI Major shareholder (21.9%) Sequoia Service provider to the Company MBA Philippines Business partner IDFC Minority shareholder in ASA India CIMS BV Service provider to CMI 30. SUBSEQUENT EVENTS DISCLOSURE During the last week of August 2025, floods affected certain regions of Pakistan. The most severe impact was observed around the Sutlej and Chenab river basins in the Punjab province. The floods only had a very limited impact on the loan portfolio of around 10 hub branches of ASA Pakistan, and currently no issues in loan collections and portfolio quality. There was no damage to its infrastructure and no safety concerns for clients and staff. In isolated cases, operations were temporarily relocated and quickly resumed. Forecasts indicate possible floodings in parts of the Sindh province. Management is closely monitoring these developments. On 16 September 2025, ASA International entered into a loan agreement with Micro, Small & Medium Enterprises Bonds S.A. - a company managed by Symbiotics, for USD 6 million, with a provision to increase the facility up to USD 10 million by request. The proceeds will be used to invest in ASAI’s operating subsidiaries and to meet the Group’s general working capital requirements. The loan has a tenor of 3 years, with 2 equal principal repayments after 24 and 36 months, semi-annual interest payments and carries an interest rate of 8.25% per annum. All of the subsequent events are non-adjusting. Income from related parties Expenses to related parties Amount owed by related parties Amount owed to related parties USD'000 USD'000 USD'000 USD'000 CMI 30 June 2025 - - 58 1 31 December 2024 - - 58 1 CMIC 30 June 2025 - - - 8 31 December 2024 - - - 6 Sequoia 30 June 2025 31 7 9 5 31 December 2024 121 14 65 4 CIMS BV 30 June 2025 - - - 2 31 December 2024 6 - 27 - MBA Philippines 30 June 2025 652 - 1,390 2,387 31 December 2024 1,695 - 709 66 IDFC 30 June 2025 - - 8 5,813 31 December 2024 3,120 - 38 146 Catalyst Continuity 30 June 2025 - - 18 - 31 December 2024 - - 18 - Continuity EBT 30 June 2025 - - 10 - 31 December 2024 - - 9 - ASAIG plc EBT 30 June 2025 - - 972 - 31 December 2024 - - 972 - ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 62
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 31. CONTINGENT LIABILITIES AND UNCERTAIN TAX POSITIONS 31.1 Contingent liabilities There is no contingent liability as of 30 June 2025. 31.2 Uncertain tax positions The evaluation of uncertain tax positions involves an interpretation of local tax laws which could be subject to challenge by a tax authority, and an assessment of whether the tax authorities will accept the position taken. The Group does not currently consider that assumptions or judgements made in assessing tax liabilities have a significant risk of resulting in a material adjustment within the next financial year. The accrual of interest and penalty amounts in respect of uncertain income tax positions is recognised as an expense within profit before tax. ASA India A demand notice of INR 12.6 million (USD 0.15 million) was raised by the income tax authorities for the assessment years (‘AY’) 2012-2013 by disallowing of certain expenditures such as the misappropriation of funds and gratuity. This case is pending before the Commissioner of Taxes (Appeals). In addition, another demand notice was been raised by the income tax authorities for INR 79 million (USD 0.94 million) for the AY 2012-2013 in December 2019 which has been challenged before the relevant assessing officer. ASA India has also applied for a stay order of the demand. In November 2022, the revenue authority adjusted INR 117 million (USD 1.4 million) against a tax refund for AY 2013-2014 to 2022-2023 for the above demands. ASA India has submitted a writ petition against that adjustment. ASA India took a 50% provision amounting to INR 46 million (USD 0.56 million) against the demands in 2022 and remaining 50% in 2024. Lak Jaya A demand notice was raised by the Department of Inland Revenue (‘IRD’) for 2016-2017 and 2017-2018 amounting to LKR 59 million (USD 0.18 million) and LKR 74 million (USD 0.23 million) respectively, by disallowing certain expenses. The Company has filed an appeal and submitted the necessary documentation. The matter is pending to the Commissioner of IRD for a long period. The entity had several discussions with IRD staff and they did not accept our arguments. As result, the entity management decided to settle these cases. The entity already requested for the process of settlements to IRD. Considering the situation, the entity had taken a provision of LKR 28 million (USD 0.09 million) in 2023 and the remaining amount of LRK 108 million (USD 0.33 million) in the 2024. ASA Uganda A demand notice of USD 0.16 million was raised by the Uganda Revenue Authority (‘URA’) regarding applicability of withholding tax on dividend payments to ASAI NV. The Company is in the process of appeal against this demand. In the mean time we have taken several steps to convince to URA, but they are very firm to their position. The group has taken a provision of USD 0.26 million for the past dividend payments as withholding tax payable and a liability of USD 0.27 million for withholding tax on future dividend distributions in the deferred tax liability as on December 2024. These have been reversed in 2025 considering the double taxation agreement. ASA Tanzania The Tanzania Revenue Authority (‘TRA’) claimed a tax demand of USD 2.5 million regarding applicability of excise duty on loan processing fees, VAT on intercompany transactions, withholding tax on stock dividend and tax on deferred income for the years 2021 and 2022. The Company appealed against the TRA. The entity has taken the full provision splitting the amount in current tax liability and other tax liability. Another regular tax audit has been conducted by TRA in 2024 covering the year 2023, where the TRA claimed approx. USD 1.0 million, mainly for excise duty. The company made an objection against the claim and has taken a full provision as other taxes payable in the year 2024. TRA has another claim against service charges during the year 2024 covering the FY year 2021 and 2022 amounting to USD 0.5 million. The entity is in the process of appeal. The entity took a full provision splitting the amount in current tax liability and other tax liability. ASA Rwanda The Rwandan Central Bank (‘BNR’) conducted an audit on service charges transactions covering the period from 1 January 2020 to 30 September 2022. ASA Rwanda sent a claim letter to BNR for reconsidering their recommendations on TP issues. However, BNR restricted the company to pay and recognize any kind of management fees. The entity is planning to appeal against this order. Since this is not a tax case, ASAI management did not take any provision. We continue to monitor the appeal process and if a tax liability would be required in the future. ASA Nigeria A tax claim of NGN 104 million (USD 68K) is received in related to year 2023. The entity has objected to the assessment. The entity is currently awaiting for an amended assessment from the tax authority. No provision is taken yet. ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 63
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 32. CAPITAL MANAGEMENT The Company is a public limited company, incorporated in England and Wales with the registered number 11361159 and with its registered office situated at High down House, Yeoman Way, Worthing, West Sussex, BN99 3HH United Kingdom. The Company listed its shares on the premium listing segment of the London Stock Exchange on 18 July 2018. The Company is not subject to externally imposed capital requirements and has no restrictions on the issue and re-purchase of ordinary shares. Many of the Group’s operating subsidiaries are regulated and subject to minimum regulatory capital requirements. As of 30 June 2025, the Group and its subsidiaries were in full compliance with minimum regulatory capital requirements. 33. FINANCIAL INSTRUMENTS The carrying value of the Group's financial assets and liabilities as of 30 June 2025 are the best approximation of the fair value. • The carrying amounts of Cash and cash equivalents, Due from banks, Due to customers, Other assets and Other liabilities approximate the fair value due to the short-term maturities of these items. • Loans and advances to customers are short term and small ticket loans (six to 12 months) and, therefore, the carrying value of these loans are the best approximate of their fair value. • Regarding the Debt issued and other borrowed funds, this amount reflects the loans from third parties on a holding level, a s well as the loans provided by third parties directly to the subsidiaries of ASA International. The loans are held at amortise d cost. The carrying amount is the best approximation of the fair value because the EIR of funding is mostly equal to the market inte rest rate. 34. MATURITY ANALYSIS OF ASSETS AND LIABILITIES The table below shows an analysis of assets and liabilities according to when they are expected to be recovered or settled. Loans and advances to customers are based on the same expected repayment behaviour as used for estimating the EIR. Debt issued and other borrowed funds reflect the contractual repayments. As at 30 June 2025 Within 12 months After 12 months Total USD'000 USD'000 USD'000 Assets Cash at bank and in hand 85,802 - 85,802 Loans and advances to customers 495,636 446 496,082 Due from banks 13,524 11,690 25,214 Equity investment at FVOCI - 345 345 Property and equipment - 15,299 15,299 Right-of-use assets 999 5,188 6,187 Deferred tax assets - 6,842 6,842 Derivative assets 852 - 852 Other assets 18,818 1,313 20,131 Intangible assets - 15,479 15,479 Total assets 615,631 56,602 672,233 Liabilities Debt issued and other borrowed funds 153,675 196,925 350,600 Due to customers 120,239 113 120,352 Retirement benefit liability 14 7,417 7,431 Current tax liability 6,663 - 6,663 Deferred tax liability - 5,308 5,308 Lease liability 550 3,592 4,142 Derivative liabilities 1,559 15 1,574 Other liabilities 29,035 8,294 37,329 Provisions 2,671 - 2,671 Total liabilities 314,406 221,664 536,070 Net 301,225 (165,062) 136,163 Unaudited ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 64
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ASA INTERNATIONAL GROUP PLC NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2025 34. MATURITY ANALYSIS OF ASSETS AND LIABILITIES (Continued) 35. EARNINGS PER SHARE Basic earnings per share ("EPS") is calculated by dividing the net profit for the year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the period. There are no share options which will have a dilutive effect on EPS. Therefore, the Company does not have dilutive potential ordinary shares, and diluted earnings per share calculation is not applicable. The following table shows the income and share data used in the basic and diluted EPS calculations: A final dividend of USD 4.1 million for 2024 was declared during HY 2025 in addition to the interim dividend of USD 3.0 million distributed in December 2024 (HY 2024: nil). The following table shows the dividend per share: 30 June 2025 30 June 2024 USD'000 USD'000 Unaudited Unaudited Net profit attributable to ordinary equity holders of the parent 27,104 13,878 Weighted average number of ordinary shares for basic earnings per share 100,000,000 100,000,000 30 June 2025 30 June 2024 USD USD Earnings per share Unaudited Unaudited Equity shareholders of the parent for the period: Basic earnings per share 0.27 0.14 Diluted earnings per share 0.27 0.14 30 June 2025 30 June 2024 USD USD Unaudited Unaudited Dividend per share 0.041 - As at 31 December 2024 Within 12 months After 12 months Total USD'000 USD'000 USD'000 Assets Cash at bank and in hand 79,145 - 79,145 Loans and advances to customers 409,769 208 409,977 Due from banks 14,911 14,352 29,263 Equity investment at FVOCI - 315 315 Property and equipment - 7,597 7,597 Right-of-use assets 882 4,490 5,372 Deferred tax assets - 7,277 7,277 Derivative assets 258 - 258 Other assets 17,020 1,766 18,786 Intangible assets - 10,512 10,512 Total assets 521,985 46,517 568,502 Liabilities Debt issued and other borrowed funds 156,778 164,072 320,850 Due to customers 90,137 34 90,171 Retirement benefit liability - 6,856 6,856 Current tax liability 13,997 182 14,179 Deferred tax liability - 4,635 4,635 Lease liability 430 3,495 3,925 Derivative liabilities 3,394 (142) 3,252 Other liabilities 18,434 7,505 25,939 Provisions 2,204 - 2,204 Total liabilities 285,374 186,637 472,011 Net 236,611 (140,120) 96,491 Audited ________________________________________________________________________________________________________________ ASA International Group plc Interim Financial Report 30 June 2025 65