Audited Financial Statements as at 31.03.2025

PMF FINANCE PLC FINANCIAL STATEMENTS 31 MARCH 2025

Shape the future with confidence

HLF/USS/DRM

Ernst & Younq Tel: +94 11 246 3500

Chartered Accountants Fax: +94 11 768 7869 Rotunda Towers Email: eysl@lk.ey.com No. 109, Galle Road ey.com

P.O. Box 101

Colombo 03, Sri Lanka

INDEPENDENT AUDITOR'S REPORT

TO THE SHAREHOLDERS OF PMF FINANCE PLC

Report on the audit of the financial statements

We have audited the financial statements of PMF Finance PLC ("the Company"), which comprise the statement of financial position as at 31 March 2025, statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policy information.

In our opinion, the accompanyinq financial statements of the Company give a true and fair view of the financial position of the Company as at 31 March 2025, and of their financial performance and cash flows for the year then ended in accordance with Sri Lanka Accountinq Standards.

Basis for opinion

We conducted our audit in accordance with Sri Lanka Auditing Standards (5LAuSs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics for Professional Accountants issued by CA Sri Lanka (Code of Ethics) and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the financial statements section of our report. including in relation to these matters. Accordinqly, our audit included the performance of procedures desiqned to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanyinq financial statements.

(Contd...2/)

Partners: D K Hulangamuwa FCA FCMA LLB (London), A P A Gunasekera MCA FCMA, Ms. Y A De Silva FCA, Ms. G G S Manatunga FCA, W K B S P Fernando FCA FCMA FCCA, B E Wijesuriya FCA FCMA,

R N de Saram ACA FCMA, Ms. N A De Silva FCA, N M Sulaiman FCA FCMA, Ms. L K H L Fonseka FCA, Ms. P V K N Sajeewani FCA, A A J R Perera FCA ACMA, N Y R L Fernando ACA, D N Gamage ACA ACMA, C A Yalaga|a ACA ACMA, Ms. P S Paranavitane ACA ACMA LL8 tColombo), B Vasanthan ACA AClvlA. w D P L Perera ACA

Principals: T P M Ruberu FCMA FCCA MBA {USJ-SL), G B Goudian ACMA, D L B Karunathilaka ACMA, W S J De Silva Bsc (Hons} - falls Msc - IT, V Shakthivel B.Com (Sp) A member tirm of Ernst & Young Global Limited

(Contd...3/)

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Other information included in the Company's 2025 Annual Report

Other information consists of the information included in the Annual Report, other than the financial statements and our auditor's report thereon. Management is responsible for the other information The Annual Report is expected to be made available to us after the date of this auditor's report.

Our opinion on the financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doinq so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

Responsibilities of management and hose charged with governance for the financial statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with Sri Lanka Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

(Contd...4/)

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In preparing the financial statements, management is responsible for assessing the Company'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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SLAuSs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SLAuSs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

1. identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understandinq of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal controls of the Company.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management's use of the going concern basis of accounting and. based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlyinq transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance reqardinq, amonq other matters, the planned scope and timinq of the audit and siqnificant audit findinqs, includinq any siqnificant deficiencies in internal control that we identify durinq our audit.

We also provide those charqed with qovernance with a statement that we have complied with relevant ethical requirements reqarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safequards applied.

(Contd...5/-)

EY

Shape the future with confidence

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when. in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

As required by section 163 (2) of the Companies Act No. 07 of 2007, we have obtained all the information and explanations that were required for the audit and, as far as appears from our examination, proper accounting records have been kept by the Company.

CA Sri Lanka membership number of the engagement partner responsible for signing this independent

auditor's report is 3755.

27 June 2025 Colombo

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PMF Finance PLC STATEMENT OF PROFIT OR LOSS

Year ended 31 March 2025

For the year ended 31 March In thousands ofrupees

Other operating expenses

Taxes on financial services

13

14.5

(992,719) (740,793)

460,310 28,443

(150,678) (53,434)

The Accounting Policies and Notes on pages 11 through 78 form an integral part of the Financial Statements.

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+*'"^^›

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PMF Finance PLC STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Year ended 31 March 2025

Deferred tax effect on actuarial (gain)/ loss

Other comprehensive income/(loss) for the year, net of tax

Total comprehensive income/(loss) for the year attributable to the owners of the Company

(359) (1,227)

(1,557) (5,319) 320,918 13,943

The Accounting Policies and Notes on pages 11 through 78 form an integral part of the Financial Statements.

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We certify these Financial Statements are in compliance with the requirements of the Companies Act o. 7 of 2007.

Amila

Head of Fi ce

The Boar of Directors is responsible for these financial statements. Signed for on behalf of the oard by;

Chief tive Officer

......... ................... . --- -.--- ..........................-...............

Chairman Director

The Accounting Policies and Notes on pages 11 through 78 form an integral part of the Financial Statements.

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STATEMENT OF CHANGES IN EQUITY

Year ended 31 March 2025

In thousands of rupees

share capital reserve fund reserve

Rs. Rs Rs. Rs.

The Accounting Policies and Notes on pages 11 through 78 form an integral part of the Financial Statements.

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PMF Finance PLC STATEMENT OF CASH FLOWS

Year ended 31 March 2025

- Gain on disposal of property, plant and equipment Net cash from operating activities

10 - (7)

813,115 (117,546)

Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at the end of the year

At the beginig of the year

Cash and cash equivalents Bank Overdraft

Cash and cash equivalents at beginning of the year At the end of the year

aok Ov

eq tea sts at the end of the year

(811,855) 224,116

464,398 240,282

16 (347,458) 464,398

673,411 337,925

(209,014) (97,643)

464,397 240,282

710,476 673,411

(1,057,932) f209.014)

(347,456) 464,398

icics and Notes on pages 11 through 78 form an integral part of the Financial Statements.

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1. CORPORATE INFORMATION

   1. Corporate Information

      PMF Finance PLC ("the Company") is a Licensed Finance Company registered under the Finance Business Act No.42 of 2011 and listed on the Colombo Stock Exchange. The Company was incorporated on 26th January 1983 and is domiciled in Sri Lanka under the provisions of the Companies Act No. 17 of 1982 and re-registered under the Companies Act No. 7 of 2007. The Company was listed on the main board of Colombo Stock Exchange on llth July 1994 and transferred to Dirisavi Board with effect from 2°dJuly 2018. The Company has obtained a credit rating of B+ Stable by Lanka Rating Agency Limited.

      The registered office of the Company and the principal place of the business is situated at No.361,361/1, R A De Mel Mawatha, Colombo 03.

      Parent Entity and Ultimate Parent Entity

      The Company's parent entity, Sterling Capital Investments (Private) Limited, is incorporated in Sri Lanka and the ultimate parent entity, Rush Japan Corporation, is incorporated in Japan.

      Number of Employees

      The staff strength of the Company as at 31stMarch 2025 was 387 (336 as at 31" March 2024).

   2. Company Information

      Principal Activities and Nature of Operations

      The principal business activities of the Company are providing finance leases, gold loans, term loans, margin trading, Entrepreneur Loans, short-term investments and mobilization of public deposits.

      There were no significant changes in the nature of the principal business activities of the Company during the financial year under review.

      
      
      

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2. BASIS OF PREPARATION
   1. Statement of Compliance

      The financial statements of the Company comprises the statement of financial position, statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows together with notes ("the Financial Statements"), as at 31" March 2025 and for the year then ended are prepared and presented in accordance with Sri Lanka Financial Reporting Standards (SLFRSs and LKASs) laid down by the Institute of Chartered Accountants of Sri Lanka (CASL). The presentation of the financial statements is also in compliance with the requirements of the Companies Act No.07 of 2007, Finance Business Act No.42 of 2011 and the listing rules of the Colombo Stock Exchange.

   2. Responsibility for the Financial Statements

      The Board of Directors of the Company is responsible for the preparation and presentation of these Financial Statements as per the provisions of the Companies Act No. 7 of 2007 and SLFRSs and LKASs.

      The Board of Directors acknowledges their responsibility for Financial Statements as set out in the "Annual Report of the Board of Directors on the Affairs of the Company", "Statement of Directors' Responsibilities" and the Certification on the Statement of Financial Position.

      These Financial Statements include the following components:

      • A Statement of Profit or Loss and Other Comprehensive Income providing the information on the financial performance of the Company for the year under review.

      • A Statement of Financial Position providing the information on the financial position of the Company as at the year-end.

      • A Statement of Changes in Equity depicting all changes in shareholders' funds during the year under review of the Company.

        - A Statement of Cash Flows providing the information to the users, on the ability of the Company to generate cash and cash equivalents and utilization of those cash flows.

      • Notes to the Financial Statements comprising Accounting Policies and other explanatory information.

      1. Approval of the Financial Statements by the Management

         The Financial Statements of the Company for the year ended 31 March 2025 (including comparatives) were approved and authorised for issue by the Management on 27 June 2025.

   3. Basis of Measurement

      The Financial Statements have been prepared on an accrual basis except for cash flow information and under the historical cost basis except for following material items in the statement of financial position:

      • Financial Assets measured at Fair Value through Other Comprehensive Income

      • Liability for Defined Benefit Obligations is recognized as the present value of the defined benefit obligation

      
      
      

      -12-

      NOTES TO THE FINANCIAL STATEMENTS

      Year ended 31 March 2025

   4. Presentation of Financial Statements

      The assets and liabilities of the Company in the statement of financial position are grouped by nature and listed in an order that reflects their relative liquidity and maturity pattern. No adjustments have been made for inflationary factors affecting the financial statements. Financial assets and financial liabilities are offset, and the net amount reported in the fmaiicial position only when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liability simultaneously. Income and expenses are not offset in the statement of profit or loss unless required or permitted by any accounting standard or interpretation, and as specifically disclosed in the accounting policies of the Company.

   5. Functional and Presentation Currency

      The financial statements are presented in Sri Lankan Rupees, which is the Company's functional currency. All financial information presented in Rupees has been rounded to the nearest thousand unless indicated otherwise. The functional currency is the currency of the primary economic environment in which the Company operates.

   6. Materiality and Aggregation

      Each material class of similar items is presented separately in the Financial Statements. Items of dissimilar nature or function are presented separately unless they are immaterial as permitted by the Sri Lanka Accounting Standard - LKAS 01 on "Presentation of Financial Statements".

   7. Rounding

      The amounts in the Financial Statements have been rounded - off to the nearest Rupees thousands, except where otherwise indicated as permitted by the Sri Lanka Accounting Standard - LKAS 01 on 'Presentation of Financial Statements'.

   8. Statement of Cash Flows

      The statement of cash flows has been prepared by using the 'Indirect Method' of preparing cash flows in accordance with the Sri Lanka Accounting Standard - LKAS 7 on 'Statement of Cash Flows'. Whereby operating activities, investing activities and financing activities are separately recognized. Cash and cash equivalents comprise of short term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Cash and cash equivalents as referred to in the statement of cash flows comprise of those items as explained in Note 16.

   9. Use of judgements and estimates

      In preparing the Financial Statements of the Company in conformity with SLFRSs and LKASs the management has made judgments, estimates and assumptions which 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. Revisions to accounting estimates are recognized prospectively.

      The most significant areas of estimation, uncertainty and criticaljudgments in applying Accounting Policies that have most significant effect on amounts recognized in the Financial Statements of the Company are as follows:

      
      
      

      • Fair Value Measurement Impairment of Financial Assets

        $p @U, g'$ of Property, Plant and Equipment

        
        
        

        NOTES TO THE FINANCIAL STATEMENTS

        Year ended 31 March 2025

      • Impairment of Non-Financial Assets

      • Employee Benefit Obligation

      • Deferred Taxation

      • Commitments and Contingencies

      1. Judgments

         Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements is included in the following notes.

         • Note 19: Classification of financial assets: assessment of the business model within which the assets are held and assessment of whether the contractual terms of the financial asset are SPPI on the principal amount outstanding. In addition to that, establishing the criteria for determining whether credit risk on the financial asset has increased significantly since initial recognition, determining methodology for incorporating forward-looking information into measurement of ECL and selection and approval of models used to measure ECL.

      2. Assumptions and Estimation Uncertainties preparation of financial statements

         Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ended 31 March 2025 is included in the following areas.

         • Impairment of financial instruments: determining inputs into the ECL measurement model, including incorporation of forward-looking information.

         • Determination of the fair value of financial instruments with significant unobservable inputs.

         • Measurement of defined benefit obligations: key actuarial assumptions.

         • Recognition of deferred tax assets: availability of future taxable profit against which carry-forward tax losses can be used.

         • Recognition and measurement of contingencies: key assumptions about the likelihood and magnitude of an outflow of resources.

         • Impairment of financial instruments: key assumptions used in estimating recoverable cash flows.

   10. Going Concern

       The Management has made an assessment of its ability to continue as a going concern and is satisfied that it has the resources to continue in business for the foreseeable future. Furthermore, the Management has assessed the existing and anticipated effects of current economic condition on the Company and is not aware of any material uncertainties that may cast significant doubt upon the Company's ability to continue as a going concern. Therefore, the Financial Statements of the Company continue to be prepared on a going concern basis.

3. CHANGES IN ACCOUNTING POLICIES

   The Company has consistently applied the Accounting Policies as set out in Notes 4.1 to 4.19 to all periods presented in these Financial Statements, as there had been no changes during the year.

4. MATERIAL ACCOUNTING POLICY INFORMATION
   
   
   

   Tb an has consistently applied the following accounting policies to all periods presented in these

   NOTES TO THE FINANCIAL STATEMENTS

   Year ended 3 l March 2025

   1. Offsetting

      Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company has a legal right to set off the recognised amounts and it intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

      Income and expenses are presented on a net basis only when permitted under LKASs/SLFRSs, or for gains and losses arising from a group of similar transactions such as in the Company's trading activity

   2. Non-Financial Assets

      1. Property, Plant and Equipment

         Property, plant and equipment are tangible items that are held for servicing, or for administrative purposes and are expected to be used during more than one period.

         1. L1 Recognition and measurement

            Property, plant and equipment are recognised if it is probable that future economic benefits associated with the assets will flow to the Company and cost of the asset can be reliably measured.

            An item of property, plant and equipment that qualifies for recognition as an asset is initially measured at its cost. Cost includes expenditure that is directly attributable to the acquisition of the asset and cost incurred subsequently to add to, replace part of, or service it. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use and the costs of dismantling and removing the items and restoring the site on which they are located.

            After recognition as an asset, an item of property, plant and equipment shall be carried at its cost less any accumulated depreciation and any accumulated impairment losses.

            Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

            If significant parts of an item of property or equipment have different useful lives, then they are accounted for as separate items (major components) of property and equipment.

            4.2.1.2 Subsequent Costs

            The subsequent cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within that part will flow to the Company and its cost can be reliably measured. The carrying amount of those parts that are replaced is derecognised. The costs of day-to-day servicing of property, plant and equipment are charged to the Statement of Profit or Loss as incurred. Costs incurred in using or redeploying an item are not included under carrying amount of an item.

            1. N

               Derecognition

               
               
               

               The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the de recognition of an item of property, plant and equipment is included in profit or loss when the item is derecognised.

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               NOTES TO THE FINANCIAL STATEMENTS

               Year ended 31 March 2025

               When replacement costs are recognised in the carrying amount of an item of property, plant and equipment, the remaining cariying amount of the replaced part is derecognised. Major inspection costs are capitalised. At each such capitalisation, the remaining carrying amount of the previous cost is derecognised.

               Any gain or loss on disposal of an item of property and equipment is recognised within other income in profit or loss.

               4.2.1.4 Depreciation

               Depreciation is calculated to write off the cost of items of property and equipment less their estimated residual values using the straight-line method over their estimated useful lives, and is generally recognised in profit or loss.

               Leased assets are depreciated over the shorter of the lease term and their usefullives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Land is not depreciated.

               The estimated useful lives of significant items of property and equipment are as follows:

               Category

               Computers

               Office equipment, furniture, fittings

               Rate (per annum)

               25%

               15%

               Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

               Depreciation of an asset begins when it is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by the management. Depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale (or included in a disposal group that is classified as held for sale) and the date that the asset is derecognised.

            2. Intangible Assets

               An intangible asset is an identifiable non-monetary asset without physical substance held for use in the production or supply of goods or services, for rent to others or for administrative purposes.

               1. Recognition and Measurement

                  An intangible asset is recognised if it is probable that the future economic benefits that are attributable to the asset will flow to the entity and the cost of the assets can be measured reliably. An intangible asset is initially measured at cost.

               2. Subsequent Expenditure

                  Subsequent expenditure on intangible assets is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.

               3. Software

                  All computer software costs incurred, licensed for use by the Company, which are not integrally related to associated hardware, which can be clearly identified, reliably measured and it's probable that they will lead to future economic benefits, are included in the Statement of Financial Position under the category intangible assets and carried at cost less accumulated amortisation and any accumulated impairment losses. .

                  Software is amortised on a straight-line basis in profit or loss over its estimated useful life, from the date on which it is available for use. The estimated useful life of software for the current and comparative periods is four years. (Rate - 25%)

                  
                  
                  

                  NOTES TO THE FINANCIAL STATEMENTS

                  Year ended 31 March 2025

               4. Derecognition

                  An intangible asset is derecognised on disposal or when no fiiture economic benefits are expected from its use or disposal. The gain or loss arising from tiie derecognition of an intangible asset shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset. It shall be recognised in profit or loss when the asset is derecogpised.

            3. Inventory - Real Estate

         Inventories in respect of property development activities are carried at the lower of cost and net realisable value. Cost and net realisable values are determined as follows:

         Properties under development for sale

         The cost of properties under development for sale comprises specifically identified cost, including the acquisition cost of land, aggregate cost of development, materials and supplies, wages and other direct expenses, and an appropriate propomon of overheads. Net realizable vatue represents the estimated selling price less estimated costs of completion and costs to be incurred in selling the property.

         Completed properties held for sale

         The cost of completed pmpemes held for sale comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

         In the case of completed properties developed by the Company, cost is determmed by apportionment of the total development costs for that development project, attributable to the unsold properties.

         Net realisable value represents the estimated selling price less costs to be incurred in selling the property.

         When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue is recognised. The amount of any write-dowo of inventories to netrealisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs.

         The amount of any reversal of any write-down of inventories is recognised as an increase in inventories and recognised as an income in the period in which the reversal occurs.

         Profit on Real Estate Sales

         Revenue is recognised when control over a product or service is transferred to tire customer, or the lessee has the right to use the asset, at the amount of promised consideration to which the Company is expected to be entitled, excluding those amounts collected on behalf of third parties. Revenue excludes value added tax or other sales taxes and is after deduction of any trade discounts.

         Revenue arising from the sale of pmpeities developed for sale in the ordinary course of business is recognised when legal assignment is completed, which is the point in time when ae customer has the ability to direct the use of the property and obtain substantially all of the remaining benefits of the property.

         Deposits and instalments received on properties sold prior to the date of revenue recognition are included in the statement of financial posrdon under contract liabilities.

   3. Non-Financial Liabilities
      
      
      

      Other liabilities include accrued expenses and other provisions. These liabilities are recorded at amounts e yable as at the reporting date.

      Accountants

      COtOM -17-

      NOTES TO THE FINANCIAL STATEMENTS

      Year ended 31 March 2025

   4. Interest

      Effective Interest Rate

      Interest income and expense are recognised in profit or loss using the effective interest method. The 'effective interest rate' is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

      * the gross carrying amount of the financial asset; or

      • the amortised cost of the financial liability.

      When calculating the effective interest rate for financial instruments other than purchased or originated credit-impaired assets, the Company estimates future cash flows considering all contractual terms of the financial instrument, but not ECL. For purchased or originated credit-impaired financial assets, a credit-adjusted effective interest rate is calculated using estimated future cash flows including ECL.

      The calculation of the effective interest rate includes transaction costs and fees and points paid or received that are an integral part of the effective interest rate. Transaction costs include incremental costs that are directly attributable to the acquisition or issue of a financial asset or financial liability.

      Amortised cost and gross carrying amount

      The 'amortised cost' of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured on initial recognition minus the principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount and, for financial assets, adjusted for any expected credit loss allowance.

      The 'gross carrying amount of a financial asset' is the amortised cost of a financial asset before adjusting for any expected credit loss allowance.

      Calculation of interest income and expense

      The effective interest rate of a financial asset or financial liability is calculated on initial recognition of a financial asset or a financial liability. In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. The effective interest rate is revised as a result of periodic re-estimation of cash flows of floating rate instruments to reflect movements in market rates of interest. The effective interest rate is also revised for fair value hedge adjustments at the date amortisation of the hedge adjustment begins.

      However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

      For financial assets that were credit-impaired on initial recognition, interest income is calculated by applying the credit-adjusted effective interest rate to the amortised cost of the asset. The calculation of interest income does not revert to a gross basis, even if the credit risk of the asset improves.

      For information on when financial assets are credit-impaired, see Note 36.

      Presentation

      Interest income calculated using the effective interest method presented in the statement of profit or loss and OCI includes:

      • interest on financial assets and financial liabilities measured at amortised cost;

        
        
        

        NOTES TO THE FINANCIAL STATEMENTS

        Year ended 31 March 2025

        • the effective portion of fair value changes in qualifying hedging derivatives designated in cash flow hedges of variability in interest cash flows, in the same period as the hedged cash flows affect interest income/expense; and

        • the effective portion of fair value changes in qualifying hedging derivatives designated in fair value hedges of interest rate risk.

          Interest expense presented in the statement of profit or loss and OCI includes:

        • financial liabilities measured at amortised cost; and

        • the effective portion of fair value changes in qualifying hedging derivatives designated in cash flow hedges of variability in interest cash flows, in the same period as the hedged cash flows affect interest income/expense.

      Interest income and expense on all trading assets and liabilities are considered to be incidental to the Company's trading operations and are presented together with all other changes in the fair value of trading assets and liabilities in net trading income.

      Interest income and expense on other financial assets and financial liabilities at FVTPL are presented in net income from other financial instruments at FVTPL.

   5. Fee and Commission Income

      Fees and commission income and expense that are integral to the effective interest rate on a financial asset or liability are included in the measurement of the effective interest rate.

      Other fees and commission income - including account servicing fees, investment management fees, sales commission, placement fees and syndication fees - is recognised as the related services are performed. Other fees and commission expense relate mainly to transaction and service fees, which are expensed as the services are received. Fee and commission expenses are recognised on an accrual basis.

      A contract with a customer that results in a recognised financial instrument in the Company's financial statements may be partially in the scope of SLFRS 9 and partially in the scope of SLFRS 15. If this is the case, then the Company first applies SLFRS 9 to separate and measure the part of the contract that is in the scope of SLFRS 9 and then applies SLFRS 15 to the residual.

      1. Introduction commission

         The introduction commission has been paid to facilitate fund mobilization, in accordance with the company's approved framework.

   6. Net Gain/(Loss) On Financial Instruments At Fair Value Through Profit and Loss

      Fair value gains and losses attributable to changes in the fair values of the equity and debt securities classified under financial assets at FVTPL is recognized in the Statement of Profit or Loss, when there is a change to the fair value of the asset.

      1. Dividend Income

Dividend income is recognized in profit or loss on the date that the Company's right to receive payments is established.

i uity instruments designated as at FVOCI that clearly represent a recovery of part of the cost e presented in OCI.

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