Interim Financial Statements as of 30/06/2025

INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30TH JUNE 2025

LOLC FINANCE PLC

NOTES TO THE FINANCIAL STATEMENTS

For the period ended 30th June 2025

1. FINANCIAL REVIEW

   Continues dominance as the largest NBFI with strong profit, asset, and portfolio growth across efficient branch network

   • Loan book expanded by Rs. 23.18 Bn. in 3 months to Rs. 320.69 Bn.

   • Net interest income grows 16.55% YoY to Rs. 11.45 Bn.

   • Reports Profit After Tax of Rs. 5.20 Bn. for the period

   • Total assets surpassed Rs. 448 Bn., growing 4.34% in the quarter

   • Borrowings rise to Rs. 31.13 Bn. to fuel lending portfolio growth

     LOLC Finance PLC, Sri Lanka's largest non-bank financial institution (NBFI), began the 2025/26 financial year on a strong note, recording significant improvements in profitability, lending volumes, and balance sheet strength in the quarter ended June 30, 2025.

     The Company reported a profit after tax (PAT) of Rs. 5.20 billion, representing a year-on-year increase of 34.54%, driven by strong core business growth and enhanced cost efficiency.

     Income and Profitability

     Gross income for the quarter rose to Rs. 18.93 billion, up from Rs. 18.52 billion in Q1 FY24. Interest income grew 3.48% year-on-year to Rs. 17.56 billion, while interest expenses declined by 14.50% to Rs. 6.10 billion, resulting in net interest income of Rs. 11.45 billion, a healthy increase of 16.55% from the previous year.

     Non-interest income also showed improvement. Net fee and commission income grew by 30.17% YoY to Rs. 728.80 million, while net trading and other operating income totaled Rs. 353.63 million. As a result, total operating income stood at Rs. 12.54 billion, an increase of 12.67% year-on-year.

     Impairment charges on financial assets reduced significantly, with total provisions amounting to Rs. 180.13 million, compared to Rs. 1.02 billion in Q1 FY24, driven by improved asset quality and recoveries. This supported a net operating income of Rs. 12.36 billion, up by 22.28% YoY.

     Operating expenses rose by 11.45% to Rs. 5.84 billion, including Rs. 1.96 billion in personnel expenses. However, LOLC Finance maintained strong cost controls across its extensive branch network, preserving its operating profit margins.

     After accounting for taxes on financial services of Rs. 1.31 billion, the Company posted a net profit of Rs. 5.20 billion, representing a 34.54% increase compared to Rs. 3.87 billion in Q1 FY24. Basic earnings per share improved to Rs. 0.16 from Rs. 0.12 a year earlier.

     Financial Position and Lending Growth

     LOLC Finance's total assets reached Rs. 448.43 billion as at June 30, 2025, growing by Rs. 18.70 billion or 4.34% over the three months. The net loan portfolio saw a strong quarterly increase of Rs. 23.18 billion, ending at Rs. 320.69 billion, reflecting continued demand for credit and the Company's dominant market position.

     Deposits from customers stood at Rs. 226.34 billion, remaining broadly stable over the quarter, while borrowings increased to Rs. 31.13 billion from Rs. 15.68 billion, indicating strategic capital management to support lending expansion.

     The Company's equity base strengthened to Rs. 154.73 billion, from Rs. 149.52 billion at the beginning of the quarter, supported by retained earnings of over Rs. 93.50 billion.

     Capital & Liquidity

     LOLC Finance remains exceptionally well-capitalized, reflecting its prudent risk management practices and strong retained earnings base. As at 30th June 2025, the Company reported a Tier 1 Capital Ratio of 24.96%, significantly above the regulatory minimum of 10%, and a Total Capital Ratio of 24.71%, well in excess of the 17% minimum requirement. This substantial capital buffer enhances the Company's resilience to economic volatility and underpins sustainable growth in its lending operations. With strong internal capital generation and effective management of risk-weighted assets, LOLC Finance is well-positioned to support future expansion while continuing to meet all prudential regulatory norms.

     With 201 branches across Sri Lanka and digital transformation initiatives underway, LOLC Finance remains agile in mobilizing deposits, expanding credit, and delivering strong shareholder value.

     LOLC Finance's Q1 performance affirms its leadership in the non-bank financial sector, marked by robust profitability, solid balance sheet growth, and sound asset quality. With strategic lending momentum and prudent risk management, the Company is well-positioned to deliver strong results for the remainder of the financial year.

     STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

     For the period ended 30th June 2025

     For the period ended

     For the period / quarter ended	30.06.2025 (Unaudited) Rs.	30.06.2024 Change (Unaudited) Rs. %
     Gross income	18,926,922,111	18,517,255,424	2
     Interest income	17,558,245,160	16,967,895,128	3
     Interest expense	(6,104,395,882)	(7,140,200,683)	(15)
     Net interest income	11,453,849,277	9,827,694,445	17
     Fee and commission income	1,015,046,015	809,191,601	25
     Less: Fee and commission expense	(286,245,318)	(249,321,866)	15
     Net fee and commission income	728,800,697	559,869,735	30
     Net gains / (losses) from trading	281,926,412	637,006,130	(56)
     Net other operating income	71,704,524	103,162,565	(30)
     Other operating income	353,630,936	740,168,695	(52)
     Total operating income	12,536,280,911	11,127,732,876	13
     Less: Impairment (charges) / reversal Loans and advances	(221,812,853)	(1,935,842,713)	(89)
     Sri Lanka International Sovereign Bonds	-	580,907,466	(100)
     Other financial assets and credit related commitments	41,682,066	331,012,701	(87)
     Total impairment (charge) / reversal	(180,130,787)	(1,023,922,546)	(82)
     Net operating income	12,356,150,124	10,103,810,329	22
     Less: Expenses Personnel expenses	(1,960,809,954)	(1,736,416,356)	13
     Depreciation and amortisation	(407,527,118)	(326,169,858)	25
     Other operating expenses	(3,472,402,257)	(3,178,470,901)	9
     Total operating expenses	(5,840,739,330)	(5,241,057,115)	11
     Profit from operating activities	6,515,410,794	4,862,753,214	34
     Share of profit of equity accounted investee	-	4,520,830	(100)
     Profit before tax expense	6,515,410,794	4,867,274,044	34
     Taxes on financial services	(1,312,093,528)	(999,875,102)	31
     Profit for the period	5,203,317,266	3,867,398,942	35
     Total other comprehensive income, net of tax	-	-	-
     Total comprehensive income for the period	5,203,317,266	3,867,398,942	35
     Basic earnings per share (Rs.)	0.16	0.12

     Figures in brackets indicate deductions.

     STATEMENT OF FINANCIAL POSITION

     As at 30th June 2025

     As at	30.06.2025 (Unaudited) Rs.	31.03.2025 (Audited) Rs.
     ASSETS
     Cash and cash equivalents	10,857,083,100		8,578,933,549
     Placements with banks	4,278,953,167		2,794,250,923
     Securities purchased under resale agreements	1,075,228,255		280,245,480
     Derivative financial instruments	15,495,958		6,499,209
     Financial assets recognised through profit or loss - measured at fair value	24,843,685,545		33,324,963,786
     Financial assets at amortised cost - loans and advances to customers	320,691,887,024		297,509,139,758
     Financial assets at amortised cost - debt and other financial instruments	13,805,725,658		14,828,164,580
     Financial assets measured at fair value through other comprehensive income	323,720,733		323,720,733
     Property, plant and equipment	14,529,767,197		14,238,536,561
     Intangible assets	59,356,171		60,107,649
     Right-of-use assets	1,508,900,479		1,481,201,307
     Investment properties	55,020,200,000		55,029,900,000
     Other assets	1,423,591,320		1,278,500,865
     Total assets	448,433,594,606		429,734,164,399
     LIABILITIES
     Bank overdraft	5,625,691,433		8,516,663,167
     Derivative financial instruments	811,849		1,937,593
     Securities sold under repurchase agreements	2,403,994,521		-
     Financial liabilities at amortised cost - due to depositors	226,338,072,179		225,717,328,979
     Financial liabilities at amortised cost - borrowings	31,129,229,837		15,680,980,318
     Retirement benefit obligation	785,206,736		752,325,773
     Current tax liabilities	1,994,941,051		2,011,921,307
     Deferred tax liabilities	2,992,430,889		2,992,430,889
     Other liabilities	22,435,950,487		24,536,628,016
     Total liabilities	293,706,328,982		280,210,216,041
     EQUITY
     Stated capital	44,078,915,852		44,078,915,852
     Reserves
     Statutory reserve fund	7,545,403,164		7,545,403,164
     Other reserves	9,601,841,541		9,154,257,761
     Retained earnings	93,501,105,068		88,745,371,582
     Total equity	154,727,265,624		149,523,948,358
     Total liabilities and equity	448,433,594,606	429,734,164,399
     Net asset value per share	4.68	4.52

     Certification :

     These financial statements have been prepared in compliance with the requirements of the Companies Act No. 7 of 2007.

     Sgd.

     ……………………………..

     (Mr.) Buddhika Weeratunga Head of Finance

     The Board of Directors is responsible for the preparation and presentation of these financial statements. Approved and signed for and on behalf of the Board,

     Sgd. Sgd.

     …………………………….. ………………………………...

     (Mr.) Krishan Thilakaratne (Mr.) Conrad Dias

     Director / CEO Chairman / Non Executive Director

     13th August 2025

     Rajagiriya (Greater Colombo)

     LOLC Finance PLC

     STATEMENT OF CHANGES IN EQUITY

     For the period ended 30th June 2025

     	Stated Capital Rs.	Statutory Reserve Rs.	Revaluation Reserve Rs.	Cash flow Hedge Reserve Rs.	Fair Value Reserve Rs.	Regulatory loss Allowance Reserve Rs.	Merger Reserve Rs.	Retained Earnings Rs.	Total Equity Rs.
     Balance as at 01 April 2024 (Audited)	306,993,805,501	6,291,146,123	1,247,187,997	41,014,495	302,199,666	6,816,123,553	(262,914,889,649)	63,568,883,512	122,345,471,198
     Total comprehensive income for the period Profit for the period	-	-	-	-	-	-	-	3,867,398,942	3,867,398,942
     Transactions recorded directly in equity Transferred to / (from) regulatory loss allowance reserve	-	-	-	-	-	(1,316,669,238)	-	1,316,669,238	-
     Transferred to retained earnings during the period	-	-	-	-	-	-	-	-	-
     Total transactions recorded directly in equity	-	-	-	-	-	(1,316,669,238)	-	1,316,669,238	-
     Balance as at 30 June 2024	306,993,805,501	6,291,146,123	1,247,187,997	41,014,495	302,199,666	5,499,454,315	(262,914,889,649)	68,752,951,692	126,212,870,139
     Balance as at 01 July 2024	306,993,805,501	6,291,146,123	1,247,187,997	41,014,495	302,199,666	5,499,454,315	(262,914,889,649)	68,752,951,692	126,212,870,139
     Total comprehensive income for the period Profit for the period	-	-	-	-	-	-	-	21,217,741,855	21,217,741,855
     Other comprehensive income, net of income tax Remeasurements of defined benefit liability	-	-	-	-	-	-	-	37,292,878	37,292,878
     Revaluation gain on property, plant and equipment	-	-	2,010,650,199	-	-	-	-	-	2,010,650,199
     Revaluation loss on fair value through OCI investments	-	-	-	-	45,393,288	-	-	-	45,393,288
     Total other comprehensive income for the period	-	-	2,010,650,199	-	45,393,288	-	-	37,292,878	2,093,336,365
     Total comprehensive income for the period	-	-	2,010,650,199	-	45,393,288	-	-	21,255,034,733	23,311,078,220
     Transactions recorded directly in equity Transferred to stated capital during the period	(262,914,889,649)	-	-	-	-	-	262,914,889,649	-	-
     Transfer to Statutory Reserve Fund	-	1,254,257,040	-	-	-	-	-	(1,254,257,040)	-
     Revaluation surplus transferred to retained earnings upon the disposal of fixed assets	-	-	(91,911,123)	-	-	-	-	91,911,123	-
     Transferred to / (from) regulatory loss allowance reserve	-	-	-	-	-	744,424,754	-	(744,424,754)	-
     Transferred to retained earnings during the period	-	-	(424,641,896)	(41,014,495)	(178,499,439)	-	-	644,155,830	-
     Total transactions recorded directly in equity	(262,914,889,649)	1,254,257,040	(516,553,019)	(41,014,495)	(178,499,439)	744,424,754	262,914,889,649	(1,262,614,842)	-
     Balance as at 31 March 2025 (Audited)	44,078,915,852	7,545,403,163	2,741,285,176	-	169,093,515	6,243,879,069	-	88,745,371,584	149,523,948,359
     Balance as at 01 April 2025 (Audited)	44,078,915,852	7,545,403,163	2,741,285,176	-	169,093,515	6,243,879,069	-	88,745,371,584	149,523,948,359
     Total comprehensive income for the period Profit for the period	-	-	-	-	-	-	-	5,203,317,266	5,203,317,266
     Transactions recorded directly in equity Transferred to / (from) regulatory loss allowance reserve	-	-	-	-	-	447,583,780	-	(447,583,780)	-
     Transferred to retained earnings during the period	-	-	-	-	-	-	-	-	-
     Total transactions recorded directly in equity	-	-	-	-	-	447,583,780	-	(447,583,780)	-
     Balance as at 30 June 2025	44,078,915,852	7,545,403,163	2,741,285,176	-	169,093,515	6,691,462,849	-	93,501,105,068	154,727,265,624

     LOLC Finance PLC

     STATEMENT OF CASH FLOWS

     For the period ended 30th June 2025

     For the period ended	30-Jun-25 Rs.	30-Jun-24 Rs.
     Cash flows from operating activities Profit before income tax expense	5,203,317,266	3,867,398,942
     Adjustments for: Depreciation & amortisation expenses	407,527,118	326,169,858
     (Profit) / loss on sales of investment property and PPE	5,957,308	(2,700,386)
     Change in fair value of derivatives - forward contracts	(10,122,493)	-
     Net mark-to-market gains - government & debt securities	(234,979,942)	(476,560,760)
     Fair value gains / (losses) from government securities	(22,816,976)	(24,100,739)
     Impairment charges / (reversal)	200,917,994	401,024,207
     Provision for defined benefit plans	45,000,000	45,000,000
     Share of (profit)/loss of associate, net of tax	-	(4,520,830)
     Investment income	(899,378,155)	(1,033,487,461)
     Interest expense	6,104,395,882	7,140,200,683
     Operating profit before working capital changes Change in other receivables	10,799,818,003 74,683,723	10,238,423,514 11,131,732
     Change in trade payables	(22,182,766)	403,205,812
     Change in other liabilities	(1,967,423,419)	345,159,122
     Change in amounts due to / due from related parties	(322,527,617)	96,233,793
     Change in financial assets at amortised cost - loans and advances	(23,425,362,083)	(5,994,517,666)
     Change in financial liabilities at amortised cost - due to depositors	2,453,548,358	10,205,901,306
     Cash (used in) / generated from operations Finance cost paid on deposits	(12,409,445,800) (7,367,497,350)	15,305,537,613 (10,932,567,442)
     Gratuity paid	(12,119,037)	-
     Income tax paid	(16,980,256)	-
     Net cash from / (used in) operating activities	(19,806,042,443)	4,372,970,171
     Cash flows from investing activities Acquisition of property, plant & equipment & investment property	(737,774,294)	(926,616,284)
     Proceeds from sale of property, plant & equipment & investment property	15,811,536	9,523,700
     Purchase of government securities	(1,681,157,188)	(6,823,938,994)
     Proceeds from sale of government securities	2,247,398,103	5,108,375,000
     Net proceeds from placements with banks	(1,491,053,506)	(1,739,155,285)
     Net proceeds from investments / debt securities	8,737,920,308	(2,482,880,045)
     Interest received from financial assets	568,099,501	471,716,820
     Net cash flows used in investing activities	7,659,244,461	(6,382,975,088)
     Cash flows from financing activities Cash flows from interest bearing borrowings	22,299,100,000	7,200,000,000
     Repayment of interest bearing borrowings	(4,459,596,279)	(8,093,077,067)
     Repayment of principal portion of lease liabilities	(134,327,871)	(136,003,621)
     Interest paid on borrowings	(389,256,582)	(585,545,753)
     Net cash flows from / (used in) financing activities	17,315,919,268	(1,614,626,441)
     Net increase / (decrease) in cash and cash equivalents	5,169,121,286	(3,624,631,358)
     Cash and cash equivalents at the beginning of the period	62,270,382	6,469,266,659
     Cash and cash equivalents at the end of the period	5,231,391,667	2,844,635,302

     Page 5

     LOLC Finance PLC

     OPERATING SEGMENTS

     For the period ended 30th June 2025

     For the period ended 30th June 2025

     Item	SME Finance Rs.	Personal Finance Rs.	Alternate Finance Rs.	Gold Loans Rs.	Others Rs.	(Eliminations) / Unallocated Rs.	Total / Consolidated Rs.
     Interest income	11,053,721,257	2,007,170,512	2,006,679,198	1,679,300,637	956,945,682	(145,572,127)	17,558,245,160
     Interest expense	(4,016,311,275)	(492,293,750)	(528,231,991)	(775,298,721)	(326,803,357)	34,543,213	(6,104,395,882)
     Net interest income	7,037,409,982	1,514,876,762	1,478,447,207	904,001,916	630,142,325	(111,028,914)	11,453,849,277
     Net fee and commission income	326,839,770	40,654,641	70,505,168	63,888,512	226,912,607	-	728,800,697
     Net gains / (losses) from trading	-	-	-	-	-	281,926,412	281,926,412
     Net other operating income	47,756,972	5,940,350	8,671,980	9,335,222	3,557,542	-	71,704,524
     Total other operating income	374,596,742	46,594,990	79,177,148	73,223,734	230,470,149	281,926,412	1,082,431,634
     Net operating income	7,412,006,723	1,561,471,752	1,557,624,355	977,225,650	860,612,474	170,897,498	12,536,280,911
     Less: Expenses
     Impairment (charge) / reversal	(17,955,541)	118,453,171	9,707,547	5,683,133	(145,783,034)	(150,236,064)	(180,130,787)
     Total operating expenses	(3,508,529,990)	(672,964,055)	(641,358,150)	(542,010,285)	(437,435,222)	(38,441,628)	(5,840,739,330)
     VAT and other taxes on financial services	(825,407,147)	(211,250,987)	(200,597,869)	(93,389,310)	(49,458,877)	68,010,662	(1,312,093,528)
     Profit from operating activities	3,060,114,047	795,709,881	725,375,883	347,509,189	227,935,340	50,230,469	5,203,317,266
     Share of profit of equity accounted investee	-	-	-	-	-	-	-
     Profit before income tax expense	3,060,114,047	795,709,881	725,375,883	347,509,189	227,935,340	50,230,469	5,203,317,266
     Other information Depreciation	183,745,764	22,698,289	46,057,529	36,824,363	13,325,766	104,875,408	407,527,118
     Capital expenditure - Property Plant and equipment	347,935,607	42,980,817	71,781,156	69,729,538	25,233,281	198,589,007	756,249,405
     Total assets	206,315,553,955	25,486,356,937	42,564,108,358	41,347,559,538	14,962,591,206	117,757,424,613	448,433,594,606
     Total liabilities	132,663,569,957	16,388,057,185	32,726,999,260	26,587,015,628	9,621,139,692	75,719,547,259	293,706,328,982

     For the period ended 30th June 2024
     Item	SME Finance	Personal	Alternate	Gold	Others	(Eliminations) /	Total /
     	Rs.	Finance Rs.	Finance Rs.	Loans Rs.	Rs.	Unallocated Rs.	Consolidated Rs.
     Interest income	11,845,724,370	1,741,127,949	1,714,121,222	1,401,926,405	1,324,515,222	(1,059,520,039)	16,967,895,128
     Interest expense	(4,712,779,349)	(542,034,068)	(625,644,975)	(763,951,931)	(460,757,935)	(35,032,425)	(7,140,200,683)
     Net interest income	7,132,945,020	1,199,093,881	1,088,476,247	637,974,473	863,757,287	(1,094,552,464)	9,827,694,445
     Net fee and commission income	268,539,524	32,304,121	46,823,693	47,563,694	164,638,704	-	559,869,735
     Net gains / (losses) from trading	-	-	-	-	-	637,006,130	637,006,130
     Net other operating income	71,126,879	8,556,250	5,319,302	12,597,986	5,562,150	-	103,162,565
     Total other operating income	339,666,403	40,860,370	52,142,994	60,161,679	170,200,853	637,006,130	1,300,038,430
     Net operating income	7,472,611,423	1,239,954,251	1,140,619,242	698,136,153	1,033,958,141	(457,546,333)	11,127,732,876
     Less: Expenses
     Impairment (charge) / reversal	(1,681,468,494)	84,864,120	(105,937,492)	(11,543,996)	2,362,869	687,800,447	(1,023,922,546)
     Total operating expenses	(3,145,673,583)	(583,530,145)	(537,847,168)	(395,214,932)	(338,819,583)	(239,971,703)	(5,241,057,115)
     VAT and other taxes on financial services	(590,795,889)	(155,868,490)	(113,432,645)	(60,234,950)	(114,957,113)	35,413,985	(999,875,102)
     Profit from operating activities	2,054,673,457	585,419,736	383,401,937	231,142,274	582,544,314	25,696,394	3,862,878,112
     Share of profit of equity accounted investee	-	-	-	-	-	4,520,830	4,520,830
     Profit before income tax expense	2,054,673,457	585,419,736	383,401,937	231,142,274	582,544,314	30,217,224	3,867,398,942
     Other information
     Depreciation	201,216,885	25,213,564	37,288,931	38,267,208	15,414,331	90,126,199	407,527,118
     Capital expenditure - Property Plant and equipment	154,568,991	19,368,331	26,628,775	29,395,763	11,840,843	69,232,340	311,035,043
     Total assets	192,335,650,616	24,100,697,504	33,135,124,574	36,578,184,781	14,733,979,338	86,148,243,645	387,031,880,458
     Total liabilities	127,596,086,667	15,988,479,918	26,042,768,938	24,266,084,943	9,774,569,086	57,151,020,766	260,819,010,319

     NOTES TO THE FINANCIAL STATEMENTS

     For the period ended 30th June 2025

2. CLASSIFICATION OF FINANCIAL ASSETS AND LIABILITIES

   For the period ended 30th June 2025

   Item	Financial instruments recognised through profit or loss (FVTPL) Rs.	Financial instruments at Amortised Cost (AC) Rs.	Financial instruments at fair value through other comprehensive income (FVOCI) Rs.	Total carrying amount Rs.
   Financial Assets Cash and cash equivalents	-	10,857,083,100	-	10,857,083,100
   Placements with banks	-	4,278,953,167	-	4,278,953,167
   Securities purchased under resale agreements	-	1,075,228,255	-	1,075,228,255
   Derivative financial instruments	15,495,958	-	-	15,495,958
   Financial assets - fair value through profit or loss	24,843,685,545	-	-	24,843,685,545
   Financial assets at amortised cost - loans and advances	-	320,691,887,024	-	320,691,887,024
   Financial assets at amortised cost - debt instruments	-	13,805,725,658	-	13,805,725,658
   Financial assets - fair value through OCI	-	-	323,720,733	323,720,733
   Other financial assets	-	573,450,765	-	573,450,765
   Total financial assets	24,859,181,503	351,282,327,968	323,720,733	376,465,230,204
   Financial Liabilities Bank overdraft	-	5,625,691,433	-	5,625,691,433
   Derivative financial instruments	811,849	-	-	811,849
   Securities sold under repurchase agreements	-	2,403,994,521	-	2,403,994,521
   Financial liabilities at amortised cost - due to depositors	-	226,338,072,179	-	226,338,072,179
   Financial liabilities at amortised cost - borrowings	-	31,129,229,837	-	31,129,229,837
   Other financial liabilities	-	4,523,419,981	-	4,523,419,981
   Total financial liabilities	811,849	270,020,407,951	-	270,021,219,800

   For the period ended 31st March 2025 (Audited)
   Item	Financial instruments recognised through profit or loss (FVTPL)	Financial instruments at Amortised Cost (AC)	Financial instruments at fair value through other comprehensive income (FVOCI)	Total carrying amount
   	Rs.	Rs.	Rs.	Rs.
   Financial Assets Cash and cash equivalents	-	8,578,933,549	-	8,578,933,549
   Placements with banks	-	2,794,250,923	-	2,794,250,923
   Securities purchased under resale agreements	-	280,245,480	-	280,245,480
   Derivative financial instruments	6,499,209	-	-	6,499,209
   Financial assets - fair value through profit or loss	33,324,963,786	-	-	33,324,963,786
   Financial assets at amortised cost - loans and advances	-	297,509,139,758	-	297,509,139,758
   Financial assets at amortised cost - debt instruments	-	14,828,164,580	-	14,828,164,580
   Financial assets - fair value through OCI	-	-	323,720,733	323,720,733
   Other financial assets	-	535,355,437	-	535,355,437
   Total financial assets	33,331,462,995	324,526,089,728	323,720,733	358,181,273,455
   Financial Liabilities Bank overdraft	-	8,516,663,167	-	8,516,663,167
   Derivative financial instruments	1,937,593	-	-	1,937,593
   Financial liabilities at amortised cost - due to depositors	-	225,717,328,979	-	225,717,328,979
   Financial liabilities at amortised cost - borrowings	-	15,680,980,318	-	15,680,980,318
   Other financial liabilities	-	4,779,298,797	-	4,779,298,797
   Total financial liabilities	1,937,593	254,694,271,261	-	254,696,208,854

3. FAIR VALUE OF ASSETS & LIABILITIES

   The Company measures the fair value using the following fair value hierarchy, which reflects the significance of the inputs used in making the measurement. An analysis of fair value measurement of financial and non-financial assets and liabilities is provided below:

   Level 1

   Inputs that are quoted market prices (unadjusted) in an active market for identical instruments. When available, the Company measures the fair value of an instrument using active quoted prices or dealer price quotations, without any deduction for transaction costs. A market is regarded as active if transactions for asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

   Level 2

   Inputs other than quoted prices included within Level 1 that are observable either directly (i.e., as prices) or indirectly (i.e., derived from prices). This category includes instruments valued using;

   1. quoted prices in active markets for similar instruments,

   2. quoted prices for identical or similar instruments in markets that are considered to be less active, or

   3. other valuation techniques in which almost all significant inputs are directly or indirectly observable from market data.

   Level 3

   Inputs that are unobservable.

   This category includes financial instruments valued using techniques that rely on significant unobservable inputs. These may involve adjustments to quoted prices of similar instruments or models such as discounted cash flows. Key inputs and assumptions include interest rates, risk premiums, market prices, exchange rates, and price volatilities.

   Observable prices or model inputs such as market interest rates are usually available in the market for listed equity securities and Government Securities such as Treasury Bills and Treasury Bonds. Availability of observable prices and model inputs reduces the need for Management judgement and estimation while reducing uncertainty associated in determining the fair values.

   For the period ended 30th June 2025

   Item	Level 1 Rs.	Level 2 Rs.	Level 3 Rs.	Total fair value Rs.	Total carrying amount Rs.
   Financial Assets Cash and cash equivalents	-	10,857,083,100	-	10,857,083,100	10,857,083,100
   Placements with banks	-	4,278,953,167	-	4,278,953,167	4,278,953,167
   Securities purchased under resale agreements	-	1,075,228,255	-	1,075,228,255	1,075,228,255
   Derivative financial instruments	-	15,495,958	-	15,495,958	15,495,958
   Financial assets - fair value through profit or loss	22,700,247,815	-	2,143,437,730	24,843,685,545	24,843,685,545
   Financial assets at amortised cost - loans and advances	-	320,235,743,147	-	320,235,743,147	320,691,887,024
   Financial assets at amortised cost - debt instruments	12,878,352,502	-	-	12,878,352,502	13,805,725,658
   Financial assets - fair value through OCI	-	323,720,733	-	323,720,733	323,720,733
   Other financial assets	-	573,450,765		573,450,765	573,450,765
   Total financial assets	35,578,600,317	337,359,675,124	2,143,437,730	375,081,713,171	376,465,230,204
   Financial Liabilities Bank overdraft	-	5,625,691,433	-	5,625,691,433	5,625,691,433
   Derivative financial instruments	-	811,849	-	811,849	811,849
   Securities sold under repurchase agreements	-	2,403,994,521	-	2,403,994,521	2,403,994,521
   Financial liabilities at amortised cost - due to depositors	-	228,963,926,059	-	228,963,926,059	226,338,072,179
   Financial liabilities at amortised cost - borrowings	-	31,442,734,525	-	31,442,734,525	31,129,229,837
   Other financial liabilities	-	4,523,419,981	-	4,523,419,981	4,523,419,981
   Total financial liabilities	-	272,960,578,368	-	272,960,578,368	270,021,219,800

   For the period ended 31st March 2025 (Audited)

   Item	Level 1 Rs.	Level 2 Rs.	Level 3 Rs.	Total fair value Rs.	Total carrying amount Rs.
   Financial Assets Cash and cash equivalents	-	8,578,933,549	-	8,578,933,549	8,578,933,549
   Placements with banks	-	2,794,250,923	-	2,794,250,923	2,794,250,923
   Securities purchased under resale agreements	-	280,245,480	-	280,245,480	280,245,480
   Derivative financial instruments	-	6,499,209	-	6,499,209	6,499,209
   Financial assets - fair value through profit or loss	31,181,526,056	-	2,143,437,730	33,324,963,786	33,324,963,786
   Financial assets at amortised cost - loans and advances	-	297,486,139,772	-	297,486,139,772	297,509,139,758
   Financial assets at amortised cost - debt instruments	13,263,650,655	640,927,123	-	13,904,577,778	14,828,164,580
   Financial assets - fair value through OCI	-	323,720,733	-	323,720,733	323,720,733
   Other financial assets	-	535,355,437		535,355,437	535,355,437
   Total financial assets	44,445,176,710	310,646,072,227	2,143,437,730	357,234,686,667	358,181,273,455
   Financial Liabilities Bank overdraft	-	8,516,663,167	-	8,516,663,167	8,516,663,167
   Derivative financial instruments	-	1,937,593	-	1,937,593	1,937,593
   Financial liabilities at amortised cost - due to depositors	-	230,572,571,747	-	230,572,571,747	225,717,328,979
   Financial liabilities at amortised cost - borrowings	-	15,542,959,060	-	15,542,959,060	15,680,980,318
   Other financial liabilities	-	4,779,298,797	-	4,779,298,797	4,779,298,797
   Total financial liabilities	-	259,413,430,364	-	259,413,430,364	254,696,208,854

4. EXPLANATORY NOTES

   • These interim financial statements have been prepared in accordance with LKAS 34 Interim Financial Reporting and do not include all of the information required for a full set of financial statements. The requirements of the Colombo Stock Exchange and the Companies Act No.7 of 2007 have also been considered in preparing these financial statements.

   • The information for the preparation of these interim financial statements has been drawn up from the previous year's audited financial records of the Company. Accounting policies and methods of computation as stated in the audited financial statements for the year 2024/25 are followed in the preparation of these Interim Financial Statements.

   • There are no significant changes in the nature of the contingent liabilities other than disclosed in the audited financials for the year ended 31 March 2025. All expenses related to management expenditure are fully provided for in these Interim Financial Statements.

5. SHARE INFORMATION

   The Stated Capital of the Company is represented by 33,079,212,299 ordinary shares. Market prices of ordinary shares recorded for the quarter ended 30th June 2025 are as follows:

   	30-Jun-25 Rs.	30-Jun-24 Rs.
   Last traded price	6.00	5.50
   Highest Price	6.50	7.50
   Lowest Price	5.40	5.20

6. DEBENTURE INFORMATION

   These represent unsecured, subordinated, redeemable debentures amounting to 50 million units, issued in September 2020. The debentures are listed on the Colombo Stock Exchange and are rated A (Positive) by Lanka Rating Agency.

   Interest rates of the debentures
   Instrument type	Interest	Rate of interest	Interest yield	Yield to maturity of	Interest rate of
   	frequency	( % p.a )	as at last trade	last trade done	comparable
   					Government Security
   Type A - 5 Years Tenor	Semi-annually	10.50%	10.50%	8.86%	9.67%
   Type B - 5 Years Tenor	Semi-annually	19.63%	19.63%	19.63%	9.67%
   Market prices & issue prices of debentures recorded during the quarter ended 30th June 2025 are as follows.
   Instrument Type	Issue Price Rs.	Highest Price Rs.	Lowest Price Rs.	Last Traded Price Rs.	Last Traded Date
   Type A - 5 Years Tenor	100.00	Not Traded	Not Traded	Not Traded	N/A
   Type B - 5 Years Tenor	100.00	Not Traded	Not Traded	Not Traded	N/A

   -

   -

7. OTHER DISCLOSURE INFORMATION

   The proceeds derived from debenture and rights issues in previous periods have been wholly allocated to the objectives delineated in the respective prospectuses. Consequently, in conformity with the stipulations set forth in Rules 7.6 (XIII) and Appendix 7A Part (a) Item 3 of the Listing Rules of the pertinent Colombo Stock Exchange (CSE), there exists no obligatory requirement for additional disclosures.

8. COMPARATIVE INFORMATION

   Comparative information has been reclassified to conform to the current period presentation, where necessary. No information has been restated.

9. EVENTS AFTER THE REPORTING PERIOD

   No circumstances have arisen since the reporting date which would require adjustments or disclosure in the Financial Statements other than disclosed below.

   Proposed Share Repurchase

   The Board of Directors of the Company had approved a proposal to undertake a share repurchase at a price of Rs. 6.00 per share, after obtaining the necessary regulatory approvals. The maximum number of shares to be repurchased under this offer was 3,519,065,138, with the offer period having commenced on 30th June 2025 and closed on 8th July 2025. The latest date for payment to shareholders was 23rd July 2025, and the effective date was 30th July 2025.

   The repurchase was carried out in compliance with the provisions of Section 64 of the Companies Act No. 07 of 2007 and the guidelines issued by the Central Bank of Sri Lanka relating to profit distributions by Licensed Finance Companies. In accordance with Section 64(2) of the Act, the Company had obtained a Solvency Certificate and a Fair Value Opinion from its external auditors. The Board of Directors had confirmed that the repurchase was in the best interest of the Company and that the consideration offered to shareholders was fair and reasonable.

   NOTES TO INTERIM FINANCIAL STATEMENTS

   As at 30th June 2025

10. SELECTED KEY PERFORMANCE INDICATORS

    Item	30-Jun-25	31-Mar-25	30-Jun-24
    Regulatory Capital Adequacy (Rs. 000)
    Tier 1 Core Capital	109,866,172	109,866,746	87,039,140
    Total Capital Base	108,783,940	108,785,841	87,032,438
    Regulatory Capital Adequacy (%)
    Tier 1 Capital Adequacy Ratio - Minimum requirement 10%	24.96	26.18	22.45
    Total Capital Adequacy Ratio - Minimum requirement 17%	24.71	25.92	22.45
    Capital Funds to Deposit Liabilities Ratio - Minimum requirement 10%	48.06	48.20	41.02
    Debt to equity ratio (with Deposits)	1.72 times	1.67 times	1.88 times
    Assets Quality (Quality of Loan Portfolio) (%)
    Net Non-Performing Loans Ratio	5.49	4.81	10.25
    Net Non-Performing Loans to Core Capital Ratio	16.42	13.35	31.13
    Provision Coverage Ratio	30.66	34.51	26.57
    Profitability (%)
    Net Interest Margin	12.83	12.94	12.88
    Return on Assets (before tax)	4.74	6.22	4.05
    Return on Equity (after Tax)	13.68	18.45	12.45
    Cost to Income ratio	46.59	43.36	47.10
    Liquidity (%)
    Available Liquid Assets to required liquid assets (Minimum 100%)	120.78	140.17	184.30
    Liquid Assets to external funds	11.48	13.59	17.76
    Interest Cover (Times)	1.85 times	1.96 times	1.54 times
    Memorandum information
    Number of branches	201	203	208
    External Credit rating	*(SL) A Positive	(SL) A Positive	(SL) A Stable

    *The Company has been assigned A positive by Lanka Rating Agency.

11. ANALYSIS OF LOANS AND ADVANCES TO CUSTOMERS

    As at	30-Jun-25 Rs.	31-Mar-25 Rs.
    Gross loans and advances	328,666,024,334	305,240,662,252
    Less: Provision for impairment	(7,974,137,311)	(7,731,522,493)
    Stage 1	(389,059,371)	(336,811,868)
    Stage 2	(208,325,639)	(418,726,450)
    Stage 3	(7,376,752,301)	(6,975,984,175)
    Net loans and advances	320,691,887,024	297,509,139,758

    Analysis of loans and advances to customers by product

    As at	30-Jun-25 Rs.	31-Mar-25 Rs.
    Speed drafts	73,052,175,220	63,732,794,336
    Finance lease receivable	72,268,615,890	71,107,219,176
    Credit cards	7,071,949,370	6,889,568,113
    Gold Loan	44,703,039,700	39,367,336,123
    Staff loans	402,679,835	435,481,449
    Housing development loans	2,203,535,476	2,231,365,078
    Personal loans	18,679,056,793	17,002,768,157
    Individual loans	5,984,990,726	6,125,200,232
    Factoring	3,455,919,533	3,727,382,041
    Loans against fixed deposits	8,460,163,933	8,563,109,648
    Margin trading	4,509,785,598	4,184,372,895
    Alternate finance portfolio - Other receivables (Murabaha, Musharakah etc.)	31,128,580,568	28,578,336,533
    Term loans
    Short term	47,437,504	68,642,074
    Long term	56,698,094,188	53,227,086,396
    Total	328,666,024,334	305,240,662,252

    SHAREHOLDERS' INFORMATION

    As at 30th June 2025

12. ANALYSIS OF DEPOSITS

    As at	30-Jun-25 Rs.	31-Mar-25 Rs.
    Local currency deposits	222,096,511,335	221,927,067,305
    Savings deposits	15,904,656,918	14,031,260,049
    Fixed deposits	206,191,854,418	207,895,807,256
    Foreign currency deposits	4,241,560,843	3,790,261,673
    Savings deposits	280,291,092	272,704,508
    Fixed deposits	3,961,269,751	3,517,557,165
    Total	226,338,072,179	225,717,328,979

13. DIRECTORS' AND CHIEF EXECUTIVE OFFICER'S HOLDING IN SHARES

    As at Jun 30, 2025

    Name of the Director No. of shares %

    1 Mr. F. K. C. P. N. Dias - Chairman / Non Executive Director	-	-
    2 Mr. D. M. D. K. Thilakaratne - Director / CEO	-	-
    3 Mr. B. C. G. de Zylva - Non Executive Director	-	-
    4 Mr. P. A. Wijeratne - Independent Director	455,998	0.00
    5 Ms. K. T. Chamila Priyangani - Independent Director	-	-
    6 Mr. A. J. L. Peiris - Independent Director	-	-
    7 Mr. S. Lankathilake - Independent Director	-	-
    Total	455,998	0.00

14. TWENTY LARGEST SHAREHOLDERS

As at Jun 30, 2025

Name of the Shareholder No. of shares %

Public shareholding

Information pertaining to public shareholding as at 30th June 2025 is as follows:

The Company is not compliant with the minimum public holding requirement stipulated in the Listing Rule 7.13.1.i (b) of the Colombo Stock Exchange. This arose consequent to the merger with subsidiaries (Commercial Leasing and Finance PLC and LOLC Development Finance PLC) took place on 31st March 2022 and 31st January 2023 respectively.

CORPORATE INFORMATION

LOLC Finance PLC Deloitte Partners, Chartered Accountants

Sri Lanka Julius & Creasy, Attorneys-at-Law

Nithya Partners

13th December 2001 REGISTRARS

Central Depository System (Pvt) Limited

A quoted public Company with limited liability Tel: 011 244 0396

PB 244 PQ During the period the principal activities of the Company comprised; Finance Business, Finance leasing, Islamic Finance, issue of Payment

134009578 Margin Trading in the Colombo Stock Exchange.

134009578 7000 Standard Chartered Bank

Nations Trust Bank PLC

The ordinary shares of the Company were listed on the Diri Savi Commercial Bank of Ceylon PLC Board of the Colombo Stock Exchange (CSE) on 7th July 2011. NDB Bank PLC

Bank of Ceylon

Lanka Rating Agency assigned the Company with a long-term rating MCB Bank

of 'A' with a (Positive) outlook. Deutsche Bank

Hatton National Bank PLC

No. 100/1, Sri Jayewardenepura Mawatha, Rajagiriya Hong Kong & Shanghai Banking Corporation

Tel: 011 7248248 Sampath Bank PLC

Fax: 011 2865606 DFCC Bank

Website: https://www.lolcfinance.com/ Peoples Bank

Swift: LOFCKLC Cargills Bank Limited

Union Bank of Colombo PLC

Mr. F. K. C. P. N. Dias - Chairman / Non Executive Director Mr. D. M. D. K. Thilakaratne - Director / CEO

Mr. B. C. G. de Zylva - Non Executive Director Mr. P. A. Wijeratne - Independent Director

Ms. K. T. Chamila Priyangani - Independent Director Mr. A. J. L. Peiris - Independent Director

Mr. S. Lankathilake - Independent Director

Mrs M V S C Rodrigo

100/1, Sri Jayawardenapura Mawatha, Rajagiriya Tel: 0117 248 578

Email: veronicac@lolcfinance.com