Asia Asset Finance : Quarterly Financial Report as at 31/03/2024

INTERIM FINANCIAL STATEMENTS

ASIA ASSET FINANCE PLC

Quarter ended 31st March 2024

Financial Review for the three months ended March 31, 2024

Financial Highlights

Total Assets LKR 25.8Bn

Loan Portfolio LKR 19 Bn.

Capital Adequacy ratio 21.22%

Total provision Rs 1.5Bn

Net Asset Per Share 27.10

ROE 10.23%

AAF have successfully consolidated the financial position of the company by ensuring further strengthening of the Secured loan portfolio and diversifying of its loan book during the year. The ROE and NAV have shown improvement during the financial year.

Interest Income LKR 5.6Bn	(5.39%)
Interest Expenses LKR 4.2Bn	(16.42%)
Total profit before Tax LKR	373.5 Mn (3.85%)

Total Profits After Tax LKR 344.2Mn ( 16.6 %)

Impairment for the year LKR 505Mn

Cost to income Ratio 58.22%

NIM 5.63% and NIM with other Income 9.3%

AAF have displayed a strong financial performance with 16.54% growth YOY on its PAT and ensured sufficient impairment have been done to reflect the external market conditions. Asia Asset Finance has continuously maintained an upward trajectory on its financial performance, with the last quarter reflecting a significant improvement in profitability.

Operational highlights

Asia Asset Finance continued to open and expand its branch network and reaching a total of 85 Branches. AAF successfully concluded approximately 10,000 transactions on the digital platform.

The success of our operations was reflected during the year with AAF receiving an A+ (Stable outlook rating) from Fitch ratings (Sri Lanka).

CONTENTS

Statement of Comprehensive Income	01
Statement of Financial Position	02
Statement of Changes in Equity	03
Statement of Cash Flows	04
Segmental Analysis	05
Explanatory Notes	06 & 07
Shareholders' Information	08 & 09
Information on Debenture	10
Analysis of financial instruments by measurement basis	11
Corporate Information	12

ASIA ASSET FINANCE PLC	Page 1
STATEMENT OF COMPREHENSIVE INCOME
FOR THE QUARTER ENDED 31ST March , 2024

Interest Income

Interest Expenses

Net Interest Income

Net Trading Gain/(Loss) on Equity Securities

Other Operating Income

Less: Operating Expenses

Personnel Costs

Provision for Staff Retirement Benefits General and Administration Expenses

Impairment Charge for Lease Rentals Receivable, Hire Purchase and Loans and Advances

Operating Profit before Value Added Tax on Financial Services

Value Added Tax on Financial Services

Profit Before Taxation

Income Tax (Expenses) / Reversal

Profit for the Period

Surplus on Revaluation Reserve on PPE

Deferred tax effect on components of other comprehensive income Actuarial gain on retirement benefit liability

Deferred tax effect on components of other comprehensive income

Other Comprehensive Income for the Period Net of Tax Total Comprehensive Income for the Period

Earnings Per Share - Basic

Earnings Per Share - Diluted

For the quarter ended

31.03.2024 31.03.2023

LKR	LKR	Change
		%
1,199,350,443	1,611,366,312	-25.57%
(848,390,711)	(1,211,810,610)	-29.99%
350,959,732	399,555,702	-12.16%
-	-	0.00%
351,787,152	159,616,587	120.40%
(128,068,767)	(102,107,067)	25.43%
(6,803,861)	(3,362,394)	102.35%
(273,819,830)	(214,058,179)	27.92%
(153,741,270)	(185,352,480)	-17.05%
140,313,156	54,292,169	158.44%
(41,042,110)	(14,000,000)	193.16%
99,271,046	40,292,169	146.38%
24,401,729	25,699,746	-5.05%
123,672,775	65,991,915	87.41%
43,511,089	-	100.00%
(13,053,327)		-100.00%
12,730,464	(8,482,160)	-250.09%
(3,819,139)	(2,544,648)	50.09%
39,369,087	(11,026,808)	-457.03%
35,227,085	54,965,107	-35.91%
1.31	0.53	147.70%
0.98	0.40	146.15%

For the Twelve Months Ended

31.03.2024	31.03.2023
LKR	LKR	Change
-	-	%
5,682,401,629	5,391,701,835	5.39%
(4,250,407,673)	(3,651,051,365)	16.42%
1,431,993,956	1,740,650,471	-17.73%
	-	0.00%
921,149,449	614,633,181	49.87%
(436,088,486)	(404,918,604)	7.70%
(14,035,862)	(8,762,394)	60.18%
(937,092,600)	(995,874,759)	-5.90%
(505,038,637)	(556,092,219)	-9.18%
460,887,820	389,635,676	18.29%
(87,399,981)	(30,000,000)	191.33%
373,487,839	359,635,676	3.85%
(29,301,136)	(64,300,254)	-54.43%
344,186,702	295,335,422	16.54%
43,511,089	-	100.00%
(13,053,327)	-	-100.00%
12,730,464	(8,482,160)	-250.09%
(3,819,139)	(2,544,648)	50.09%
39,369,087	(11,026,808)	-457.03%
383,555,789	284,308,614	34.91%
2.77	2.38	16.54%
2.08	1.78	16.54%

• The above figures are provisional and subject to audit.
• Figures in brackets indicate deductions.

ASIA ASSET FINANCE PLC	Page 2
STATEMENT OF FINANCIAL POSITION	(0.8896)
AS AT 31ST MARCH 2024

ASSETS

Cash and Cash Equivalents

Investment in Reverse Repurchase Agreements Against Treasury Bills and Bonds

Financial assets at amortized cost - Loans and advances Financial assets at amortized cost - Lease rentals receivable and hire purchase

Other Assets

Current tax assets (net)

Advances, Deposits and Prepayments

Financial assets - Fair value through other comprehensive

income

Right-of-use assets

Property, Plant and Equipment

Investment Property

Deferred Tax Assets

Intangible Assets

Total Assets

LIABILITIES

Financial liabilities - Due to banks

Other Liabilities

Current Tax Liabilities

Financial liabilities - Other borrowed funds

Lease liability

Due to Customers

Saving Control

• Debenture
  Retirement Benefit Liability
  Total Liabilities
  SHAREHOLDERS' FUNDS Stated Capital Retained Earnings
  Statutory Reserve Fund and Other Reserves
  Total Equity
  Total Equity and Liabilities Net Assets Per Share
• • Figures in brackets indicate deductions.

31.03.2024	31.03.2023	Change
LKR	LKR	%
Audited*	Audited*
3,952,176,640	2,063,128,895	91.56%
1,690,988,386	2,444,830,041	-30.83%
18,791,889,308	19,028,664,556	-1.24%
265,619,141	449,636,218	-40.93%
130,133,094	127,559,654	2.02%
29,100,563	27,593,548	5.46%
102,813,724	77,034,568	33.46%
506,659	506,659	0.00%
186,439,060	180,642,208	3.21%
313,284,112	203,787,014	53.73%
324,299,107	324,062,193	0.07%
38,550,181	37,422,647	3.01%
46,617,448	47,676,226	-2.22%
25,872,417,424	25,012,544,427	3.44%
47,637,705	3,763,272	1165.86%
558,959,629	228,236,872	144.90%
47,054,021	-	100.00%
6,050,495,203	6,062,427,129	-0.20%
219,443,235	199,066,151	10.24%
14,472,621,940	13,273,274,496	9.04%
12,514,226	1,694,076	638.70%
1,058,730,444	2,187,519,136	-51.60%
39,543,426	45,722,533	-13.51%
22,506,999,830	22,001,703,665	2.30%
2,205,463,801	2,205,463,801	0.00%
794,058,040	588,534,571	34.92%
365,895,753	216,842,390	68.74%
3,365,417,594	3,010,840,762	11.78%
25,872,417,424	25,012,544,427	3.44%
27.10	24.24	11.8%

I certify that the above Interim Financial Statements are in compliance with the requirements of the Companies Act No. 7 of 2007 and give a true and fair view of the state of affairs of Asia Asset Finance PLC as at 31st March 2024 and its profit for the Period ended 31st March 2024

………Sgd……………….

Geethika Elwalage

Deputy General Manager - Finance

The Board of Directors is responsible for the preparation and presentation of these Interim Financial Statements. Approved and Signed for and on behalf of the Board:

………Sgd……………….	………Sgd……………….
R.J.A. Gunawardena	Rajitha Ananda Bandara Basnayake
Director/CEO	Director/Chairman of the Audit Committee
27 th May 2024
Colombo
* The above figures are provisional and subject to audit.

ASIA ASSET FINANCE PLC	Page 3
STATEMENT OF CHANGES IN EQUITY
AS AT 31ST MARCH 2024
		Stated Capital

Balance as at 1st April, 2022 (Audited)

Dividend for Preference shares

Profit for the Year Ended 31st March 2023 Other comprehensive income (net of tax) Transferred to/from reserves During the Period

Balance as at 31st March 2023 (Audited*)

Balance as at 1st April, 2023 (Audited*) Dividend for Preference shares

Profit for the Year Ended 31st March 2024 Actuarial gain on retirement benefit liability Other comprehensive income (net of tax)

Revalaion surplus

Transferred to/from reserves During the Period

Balance as at 31st March , 2024 (Audited*)

									Statutory	Reguler Loss
Ordinary Share		Preference Share	Revalaion reserve		General		Reserve	Allowance		Accumulated
Capital		Capital	fund		Reserve		Fund	Reserve		Profit/(Loss)		Total
Rs.		Rs.			Rs.		Rs.		Rs.			Rs.		Rs.		Rs.
1,791,478,691		413,985,110			-		3,000,000		82,270,012			-		464,777,293	#	2,755,511,106
													(28,978,958)		(28,978,958)
-	-				-	-			-	295,335,422		295,335,422
													(11,026,808)		(11,026,808)
-		-					-		56,861,723			74,710,655		(131,572,378)		-
-		-			-		-		56,861,723 #	74,710,655	123,757,278	#	255,329,656
1,791,478,691		413,985,110			-		3,000,000		139,131,735 #	74,710,655	588,534,571	#	3,010,840,762
1,791,478,691	413,985,110			-	3,000,000	139,131,735			74,710,655	588,534,571		3,010,840,762
													(28,978,958)		(28,978,958)
													344,186,702		344,186,702
													12,730,464		12,730,464
					(13,053,327)								(3,819,139)		(16,872,466)
					43,511,089											43,511,089
-	-				-	68,837,340			49,758,260	(118,595,600) #	-
1,791,478,691	413,985,110 #	30,457,762	3,000,000	207,969,075			124,468,915	794,058,040	#	3,365,417,594

* Figures in brackets indicate deductions.

ASIA ASSET FINANCE PLC			Page 4
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31ST MARCH 2024
		2023/2024	2022/2023
		Rs.		Rs.
Cash flows from operating activities	373,487,839	359,635,676
Profit before income tax
Adjustments for	78,086,569	64,806,550
Depreciation and amortization
Amortization of right-of-use asset	67,224,605	65,237,164
Interest expenses on lease liability	42,338,086	31,420,978
Impairment of lease, hire purchase, loans and advances	505,038,637	556,092,219
Early termination of loans, leases and hire purchase	(10,044,184)	17,618,156
Gold Loan written off
Non-cash items included in profit before tax (WHT and Notional tax)		(268,538)
Gains from sale of property, plant and equipment, investment property and real estate in	1,077,345	(3,911,152)
Gain on expiration of operating lease agreement during the year		(2,166,889)
Provision for retirement benefit liability	14,035,862	8,762,394
Interest expense on other borrowings	1,183,003,442	1,150,280,663
Interest expense on debentures		361,151,772		380,783,577
Cash generated from operations before working capital changes	2,615,399,972	2,628,290,798
Changes in working capital
Decrease in lease rentals receivable and hire purchase	228,079,868	644,983,536
Increase in loans and advances	(302,281,998)	(4,883,695,032)
Increase in other receivables	(2,573,440)	(4,407,550)
(Increase)/decrease in deposits and prepayments	(25,779,156)	(23,785,190)
Increase in deposits from customers	1,210,167,594	4,579,788,301
Increase in other non-financial liabilities		330,029,125		194,733,490
Net cash from/(used in) operating activities before income tax payments	4,053,041,966	3,135,908,353
Taxes paid	(1,754,130)	(2,471,149)
Gratuity paid	(7,484,505)	(4,318,400)
Lease rent advance paid	(94,982,460)	(82,804,290)
Dividednd paid	(28,978,958)	(28,978,958)
Net cash generated from/(used in) operating activities		3,919,841,913		3,017,335,556
Cash flows from investing activities	(142,266,165)
Acquisition of property, plant and equipment	(74,641,867)
Acquisition of intangible assets	(8,472,875)	(12,443,299)
Acquisition/additions to investment property	(1,452,837)	(700,000)
Proceeds from sale of investment property	-	37,500,000
Settlement for intangible asset	-	(1,316,500)
Proceeds from sale of property, plant and equipment	8,557,452	2,808,208
Net cash used in investing activities		(143,634,425)		(48,793,458)
Cash flows from financing activities
Repayment of other borrowed funds	(5,037,935,367)	(4,585,280,017)
Proceeds from other borrowed funds	3,843,000,000	4,039,000,000
Proceeds from debenture issue	-	-
Repayment of debenture	(1,489,940,465)	(266,141,780)
Proceed from preference share issue		-		-
Net cash generated from/(used in) financing activities		(2,684,875,831)		(812,421,797)
Net increase in cash and cash equivalents	1,091,331,657	2,156,120,301
Cash and cash equivalents at the beginning of the year		4,504,195,664		2,348,075,363
Cash and cash equivalents at the end of the year	5,595,527,321	4,504,195,664
At the beginning of the year
Cash and cash equivalents	2,063,128,895	1,397,632,551
Investment in reverse repurchase agreements against the treasury bills and bonds at amo	2,444,830,041	989,433,452
Bank overdraft	(3,763,272)	(38,990,640)
		4,504,195,664		2,348,075,363
At the end of the year
Cash and cash equivalents	3,952,176,640	2,063,128,895
Investment in reverse repurchase agreements against the treasury bills and bonds at amo	1,690,988,386	2,444,830,041
Bank overdraft	(47,637,705)	(3,763,272)
		5,595,527,321		4,504,195,664

Figures in brackets indicate deductions.

Colombo

27 th May 2024

ASIA ASSET FINANCE PLC

Page 5

253,348,763 #############

FINANCIAL REPORTING BY SEGMENT

As per the provisions of Sri Lanka Financial Reporting Standard, SLFRS- 8, the operating segment of the company have been identified based on the product and services offered by the Company of which level of risk and rewards is significantly different from one another. Top management of the company considers the operating results and condition of its business segments in their decision making process and performance evaluation. Types of products and services from which each operating segment derives its revenues are described as follows.

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the company's other components. All operating segments' operating results are reviewed regularly by the Senior Management to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.

Segment results that are reported to the Senior Management Personnel and the Board of Directors include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

Types of products and services from which each operating segment derives its revenues described as follows;

Lease & Hire-purchase This segment includes Leasing and Hire Purchase products offered to the customers. Loans This segment includes Loan products offered to the customers.

Loans This segment includes Loan products offered to the customers

Gold Loans This segment includes Gold Loan products offered to the customers

Investment This segment includes treasury investments

Other business This segment include all other business activities that engaged other than above segments.

	Finance lease	Hire purchase	Gold Loan	Loans and advances	Investment	Other	Total
	31.03.2024	31.03.2023	31.03.2024	31.03.2023	31.03.2024	31.03.2023	31.03.2024	31.03.2023	31.03.2024	31.03.2023	31.03.2024	31.03.2023	31.03.2024	31.03.2023
	Rs.	Rs.	Rs.	Rs.	Rs.	Rs.	Rs.	Rs.	Rs.	Rs.	Rs.	Rs.	Rs.	Rs.
Interest income	54,229,485	137,929,191		2,787,190	4,046,372,145	4,348,089,844	565,135,466	369,302,150	1,016,664,533	533,593,460		-	5,682,401,629	5,391,701,835
Other income	52,533,609	69,145,503		7,000	657,741,265	385,765,899	198,728,276	147,465,699	179,520	240,000	11,966,780	12,009,081	921,149,449	614,633,182
Total revenue	106,763,093	207,074,694	#	2,794,190	4,704,113,410	4,733,855,743	763,863,742	516,767,849	1,016,664,533	533,833,460	12,146,300	12,009,081	6,603,551,078	6,006,335,017
Segmental result	7,731,189	13,875,270	#	187,228 #	340,645,696	317,197,254	55,314,758	34,626,603	73,621,184	35,770,103	879,567	804,682	478,192,395	402,461,139
Value added tax on financial services													(104,704,556)	(42,825,463)
Profits from operations													373,487,839	359,635,676
Income tax charge for the year													(29,301,136)	(64,300,254)
Net profit for the year													344,186,702	295,335,422
Segment assets	265,619,141	449,636,218	-	-	14,085,060,429	16,400,268,960	4,706,828,879	2,628,395,596	5,643,671,684	4,508,465,595	-	-	24,701,180,134	23,986,766,369
Unallocated assets	-	-	-	-	-	-	-	-	-	-	1,171,237,290	1,025,778,056	1,171,237,290	1,025,778,056
Total assets	265,619,141	449,636,218	-	-	14,085,060,429	16,400,268,960	4,706,828,879	2,628,395,596	5,643,671,684	4,508,465,595	1,175,056,430	1,025,778,056	25,872,417,424	25,012,544,425
													-
Segment liabilities	232,722,862	403,558,915	-	-	12,340,660,218	14,719,621,058	4,123,899,659	2,359,045,895	4,944,716,779	4,046,452,243	-	-	21,641,999,519	21,528,678,111
Unallocated liabilities		-	-	-	-		-	-	-	-	865,000,311	473,025,554	865,000,311	473,025,554
Total liabilities	232,722,862	403,558,915	- #	- #	12,340,660,218	14,719,621,058	4,123,899,659	2,359,045,895	4,944,716,779	4,046,452,243	865,000,311	473,025,554	22,506,999,830	22,001,703,665

In determining segment results, expenses have been allocated on proportionate basis on interest income and the segment liabilities have been proportionately allocated based on segment assets.

ASIA ASSET FINANCE PLC	Page6
NOTES TO THE FINANCIAL STATEMENTS
AS AT 31ST MARCH 2024

01. The Interim Financial Statements are in compliance with the Sri Lanka Accounting Standard - LKAS 34: Interim Financial Reporting and the provisions of the Companies Act No. 7 of 2007 and provide the information as required in terms of Rule 7.4 of the Colombo Stock Exchange.

02. The company has adopted consistent accounting policies and methods of computation as disclosed in the Annual Report for the year ended 31st March 2024.

03. The Interim financial statements of Asia Asset Finance PLC for the period ended 31st March , 2024 (including comparatives) were approved and authorized for issue on 27th May , 2024 in accordance with a resolution of the board of directors on 27th May 2024.

04. The presentation and classification of the financial statements for previous periods have been amended where relevant for better presentation and to be comparable with those of the current

05. Impact Due To Current Economic Condition

The Company has taken the following measures to ensure it continues its operations as a going

• Focus on asset backed lending
• Strict credit evaluation to minimize credit risk
• Restructure/reshedulment of stressed loans due to current adverse market conditions
• Additional financing to minimize liquidity risk
• Managing operational cost

Based on proactive analyses and our operating model, financial strength of the company and the backing of the group, the management is confident that the company has no impact to its business continuity and expects to manage the economic challenges effectively

06. Ordinary Share capital is represented by number of shares in issue as follows.

	31.03.2024	31.03.2023
Issued and Fully Paid Ordinary Shares (Quoted)	124,195,533	124,195,533
07. Market Value of Shares(Ordinary Shares)
	2023/2024 (4th	2022/2023 (4th
	Quarter)	Quarter)
	Rs.	Rs.
Highest Traded Price (14/03/2024)	15.70	9.00
Lowest Traded Price (24/01/2024)	11.10	7.40
Last Traded Price (28/03/2024)	15.00	8.20
Close Price(28/03/2024)	15.00	8.30

08 Prefernce Share capital is represented by number of shares in issue as follows.

Asia Asset Finance PLC issued 41,398,511 preference shares [non-cumulative, irredeemable and convertible] at a price of LKR 10/- per share. (Carrying a Preferential Non-Cumulative Dividend of Cents Seventy (Rs. 0.70) Per Convertible Irredeemable Preference Share, per financial year.)

	Number	Rs.
Preference shares	41,398,511	413,985,110
Balance at the beginning of the period	-	-
Share issued during the period	41,398,511	413,985,110
Balance at the end of the period	41,398,511	413,985,110
8.1 Market Value of Shares(Prefernce Shares)
	2023/2024 (4th	2022/2023 (4th
	Quarter)	Quarter)
	Rs.	Rs.
Highest Traded Price (14/03/2024)	15.30	11.10
Lowest Traded Price (06/02/2024)	11.00	8.70
Last Traded Price (25/03/2024)	15.10	8.70
Close Price(25/03/2024)	15.10	10.50

09. There has been no significant change to the contingent liabilities disclosed in the previous Audited Financial statements.

ASIA ASSET FINANCE PLC	Page 7
NOTES TO THE FINANCIAL STATEMENTS
AS AT 31ST MARCH 2024

10 Events after the statement of financial position date

.

There were no material events reported since 31st March 2024 that require disclosure in these

Financial Statements

11 Key performance Indicators

.

	31.03.2024	31.03.2023
Debt Holders
Debt/Equity Ratio (Times)	6.12	7.15
Interest Cover (Times)	1.09	1.15
Capital Adequacy
Tier 1 Capital Adequacy Ratio (Minimum 8.5%)	21.22%	27.43%
Total Capital Adequacy Ratio (Minimum 12.5%)	20.87%	27.43%
Capital Funds to Deposit Liabilities Ratio	23.25%	22.68%
Profitability
Net Interest Margin - Annualized	5.63%	7.86%
Return on Assets -Annualized	1.35%	1.18%
Return on Equity -Annualized	10.23%	9.81%
Asset Quality
Gross Non-Performing Accommodations Ratio	22.10%	12.79%
Net Non-Performing Accommodations Ratio	15.57%	5.84%
Provision Coverage Ratio	29.57%	63.32%
Liquidity
Available Liquid Assets to Required Liquid Assets	501.43%	499.85%
Advances to deposit (%)	141.97%	159.703%