Financial Statement (STG Consolidated FY2025 English)

Full Year 2025 Investor Bulletin

Issued by Investor Relations Department

Financial Results For The Year Ended 31 December 2025

KEY FINANCIAL HIGHLIGHTS

^ 1,261.2

12.8%▼ $336.3

Operating Revenue

^ 395.6

36.4%▼ $105.5

Net Profit After Zakat(1)

^ 938.5

6.6% $250.3

Operating Expenditures

^ 716.3

21.4%▼ $191.0

Gross Profit

^ 438.5

32.2%▼ $116.9

EBITDA

^ 3.30

$0.88

Earnings Per Share "EPS"

SEGMENTS INFORMATION

(All figures are in millions, except earnings per share) - All results figures compared to the previous year (1) Attributable to Shareholders of the Parent

MESSAGE FROM THE GROUP CHIEF EXECUTIVE OFFICER

The financial results for FY 2025 demonstrated the strength of the Group's operating model and its ability to deliver balanced and sustainable growth, supported by continued progress in diversifying revenue streams and enhance operational resilience. We continued executing our strategic priorities through the launch of new product set, enhancing capital market infrastructure, and accelerating our data and technology capabilities to reinforce the Saudi capital market's as a leading regional and global financial center.

The year marked pivotal steps to deepen the market and enhance its efficiency. We introduced the fixed income market-making framework to strengthen liquidity in the debt market, expanding institutional access across through the launch of OTC settlement services for listed debt instruments and repo transactions, and introduced Saudi Depositary Receipts (SDRs) as a strategic initiative to enhance integration and international connectivity.

As part of advancing the data ecosystem, we have also launched Data Hub through the Group's subsidiary and innovation arm, WAMID. The platform serves as a centralized and trusted platform that enhances transparency and reliability while supporting institutional decision-makers with accurate and comprehensive data aligned with international best practices across the capital market ecosystem.

Enhancing capital market efficiency remains a top priority, supported by advanced technological systems, robust risk management frameworks. These efforts enable the expansion of the investor base and higher liquidity levels, particularly as foreign investor access reforms take effect, an important milestone reflecting the market's maturity and the integration of its regulatory and operational framework.

Enhancing capital market efficiency remains a top priority, supported by advanced technological systems, robust risk management frameworks. These efforts enable the expansion of the investor base and higher liquidity levels, particularly as foreign investor access reforms take effect, an important milestone reflecting the market's maturity and the integration of its regulatory and operational framework.

Eng. Khalid Abdullah AlHussan

Group Chief Executive Officer Saudi Tadawul Group Holding Co.

^ 373.7 ^ 638.7 ^ 248.9

19.0%▼

$99.6

16.6%▼

$170.3

13.3%

$66.4

Capital Markets

Segment

Post Trade Services

Segment

Data and Technology

Services Segment

KEY BUESINESS HIGHLIGHTS

Total Number of New Listed Securities(1)

Main Market, Nomu - Parallel Market, Funds and Debt Instruments

52

Total Number of Listed Securities

Main Market, Nomu - Parallel Market, Funds and Debt Instruments

473

Average Daily Traded Value "ADTV" (Billion)

Main Market, Nomu - Parallel Market

^ 5.21 $1.39

Registered Qualified Foreign Investor (QFIs)(2)

4,620

Market Capitalization (Billion)

Main Market, Nomu - Parallel Market

^ 8,860

$2,363

Qualified Foreign Investors (QFIs) Holding Value(2) (Billion)

^ 338

$90

(1) Including the transferred companies from Nomu - Parallel Market to the Main Market

(2) The concept of the Qualified Foreign Investor (QFI) was eliminated in the Main Market in 01 February 2026, thereby allowing all categories of foreign investors to access the market without the need to meet qualification requirements.

KEY OPERATIONAL HIGHLIGHTS

Saudi Exchange introduced the Fixed Income Market Making Framework to boost liquidity and efficiency in the sukuk and bonds market.

Saudi Exchange launched the Capital Management System, a digital platform that simplifies IPO for investors, issuers, and CMIs.

WAMID introduces WAMID Data Hub, a powerful and centralized hub for information and data on Saudi Arabia's dynamic capital markets, offering comprehensive updates for all market participants.

Saudi Exchange welcomed Saudi Arabia's addition to the J.P. Morgan EM Bond Index Watchlist, signaling global confidence in the Saudi debt market.

The launch of the Edaa Connect platform by the Securities Depository Center (Edaa), aimed streamlining investing in investment funds with greater efficiency.

Saudi Tadawul Group hosted the second Capital Markets Forum in Hong Kong, strengthening financial connectivity between Asia and the Kingdom.

Saudi Tadawul Group launched the STG App, providing investors real-time access to market data, news, and portfolios through a single platform.

Muqassa and OSTTRA signed a cooperation agreement that aims to leap forward in Muqassa's mission to enhance clearing solutions and streamline operational efficiency, ensuring a top-tier service for its clients while adhering to the international best practices.

FINANCIAL PERFORMANCE ANALYSIS

Key Financial Results

FY 2025 compared to FY 2024

The Group's net profit after Zakat amounted to ^ 395.6 million in 2025, compared to ^ 621.8 million in the previous year, representing a decrease of 36.4%.

The reasons for the decrease in net profit after zakat for 2025, compared to previous year include:

Operating revenues amounted to ^ 1,261.2 million in 2025, compared to ^ 1,446.6 million in the previous year, representing a decrease of 12.8%.

The gross profit amounted to ^ 716.3 million in 2025, compared to ^ 911.8 million in the previous year, representing a decrease of 21.4%.

operating expenditures, which amounted to ^ 938.5 million in 2025, compared to ^ 880.4 million in the previous year, representing an increase of 6.6%, as a result of the strategic execution of the Group's plans to reinforces its future growth directions, which have resulted in an increase in systems maintenance costs, depreciation and amortization costs, as well as increase in workforce costs driven by a rise in headcount.

The operational profit reached ^ 322.7 million in 2025, compared to ^ 566.1 million in the previous year, representing a decrease of 43.0%.



The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) amounted to ^ 438.5 million in 2025, compared to ^ 647.2 million in the previous year, representing a decrease of 32.2%

The earnings per share amounted to ^ 3.30 in 2025, compared to ^ 5.18 for previous year, representing a decrease of 36.4%.

KEY FACTORS IMPACTING FINANCIAL RESULTS

ADTV Revenue (Million)

Full Year 2025

^ 516.6

$137.8

Full Year 2024

^ 754.2

$201.1

Operating Revenue Model

The Group's operating revenue model relies on two main sources, which are as follows:

Average Daily Traded Value (ADTV):

Non-ADTV Revenue (Million)

Full Year 2025

^ 744.6

$198.6

Full Year 2024

^ 692.3

$184.6

The revenues that are impacted by the ADTV.

Non-Average Daily Traded Value (Non-ADTV):

The revenues that are not impacted by the ADTV, and they constitute an important element in diversifying the Group's business model.

Yearly Evolution - Average Daily Traded Value (ADTV) (^ Billion)

Y-o-Y

Y-o-Y

+7.7%

-22.8%

+39.4%

-30.6%

-22.4%

2020

2021

2022

2023

2024

FY 2024

FY 2025

Quarterly Evolution - Average Daily Traded Value (ADTV) (^ Billion)

Q-o-Q

Y-o-Y

-30.6%

-0.8%

-7.3%

-9.1%

-13.9%

Q4 2024

Q1 2025

Q2 2025

Q3 2025

Q4 2025

FY 2024

FY 2025

5.0

5.2

5.6

6.0

6.0

7.5

SUMMRIZED FINANCIAL STATEMENTS

Balance Sheet Snapshot

Statement Of Income Snapshot

Cash Flows Snapshot

Capital Markets Segment

Revenues of the Capital Markets segment decreased in 2025 to reach ^ 373.7 million, representing a decrease of 19.0%, compared to ^ 461.3 million in the previous year, as a result of a 30.6% decrease in the average daily trading values. The impact was partially offset by a 13.6% increase in listing services revenues.

Segment's contribution

to Operating Revenues

Full Year 2025

29.6%

Full Year 2024

31.9%

Segment Financial Performance (^ Million)

-19.0%

-5.1%

-5.7%

-5.1%

-6.2%

Q4

2024

Q1

2025

Q2

2025

Q3

2025

Q4

2025

Full Year

2024

Full Year

2025

Details of Capital Markets Segment Revenue(1)

Millions

(1) All sub-segments of the Capital Market are non-ADTV linked, except the Trading Service.

Full Year 2024

Post Trade Segment

Revenues of the Post-Trade segment decreased in 2025 to reach ^ 638.7 million, representing a decrease of 16.6% compared to ^ 765.7 million in the previous year, due to a 30.6% decrease in the average daily trading values. The impact was partially offset by a 9.1% increase in registry services revenues.

Segment's contribution

to Operating Revenues

Full Year 2025

50.6%

Full Year 2024

52.9%

Segment Financial Performance (^ Million)

-16.6%

-3.2%

-3.8%

-3.4%

-3.0%

Q4

2024

Q1

2025

Q2

2025

Q3

2025

Q4

2025

Full Year

2024

Full Year

2025

Details of Post Trade Segment Revenue(1)

Millions

(1) All sub-segments of the Post Trade Services segments are not related to trading activities (Non-ADTV), except for the trading service, which includes revenues related to trading activities (ADTV) and revenues not related to trading activities (Non-ADTV).

Full Year 2024

Data and Technology Services Segment

Revenues of the Data and Technology Services segment increased in 2025 to reach ^ 248.9 million, representing a growth of 13.3% compared to ^ 219.6 million in the previous year, primarily driven by an increase in co-location services revenues, as well as an increase in Direct Financial Network Company's revenues.

Segment's contribution

to Operating Revenues

Full Year 2025

19.7%

Full Year 2024

15.2%

Segment Financial Performance (^ Million)

+13.3%

-10.8%

+5.0%

+15.1%

-15.7%

Q4

2024

Q1

2025

Q2

2025

Q3

2025

Q4

2025

Full Year

2024

Full Year

2025

Details of Data and Technology Services Segment Revenue

Millions

Full Year 2024

ABOUT SAUDI TADAWUL GROUP

Saudi Tadawul Group Holding Company, a leading diversified capital markets group in the MENA region, is a holding company established in March 2021, following the transformation of the Saudi Stock Exchange (Tadawul) into a holding company. It is the parent company of four subsidiaries, including:

Saudi Exchange Company (Saudi Exchange)

Saudi Exchange, which acts as the Kingdom's securities exchange services and is the official source of market information.

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Securities Depository

Center Company (Edaa)

Edaa, which works is responsible for registering the ownership of securities.

Visit website

Securities Clearing Center Company (Muqassa)

Muqassa, which works to reduce post-trade risk by introducing new mechanisms to guarantee the settlement of trades.

Visit website

Tadawul Advance Solution Company (WAMID)

WAMID, the applied technology services business and innovation arm of the Group, which is focused on helping market players solve real-world challenges.

Visit website

In alignment with the Group's growth strategy and diversification ambitions as outlined in its strategic plan, the Group announced in June 2024 the completion of its acquisition of a 32.6% strategic stake in DME Holdings Limited. Subsequently, DME Holdings Limited has been rebranded as Gulf Mercantile Exchange (GME).

This step supports the Group's strategic move towards leveraging the Middle East's geographic proximity to both key commodity production hubs and end-markets. This transaction will unlock further opportunities in the energy, metals and agricultural commodity markets and will support the ongoing transition to a sustainable economy through the launch of next-generation derivative contracts.

As previously announced in May 2023, the Group announced the completion of its first inorganic growth towards achieving sustainable growth by acquiring a 51% stake in Direct Financial Network Company (DirectFN) by WAMID, which reflects the Group's ambitious strategy to create an opportunity to build new capabilities, elevate innovation in the regional capital markets and diversify revenue.

The Group benefits from its vertically integrated and diversified business model between its subsidiaries, ensuring efficient operations and the independence of each subsidiary. This facilitates the introduction of best-in-class services to all market participants, diversification of investment opportunities and the continued development of the Saudi capital market.

Advancing the Saudi capital market's infrastructure is one of the Group's objectives, in line with global best practices, while solidifying Saudi Arabia's position as an emerging market leader, a technologically advanced and attractive sophisticated global investment destination, and the gateway to the Middle East and North Africa (MENA) region.

The Group will remain one of the enabling forces for the Saudi economy and one of the main pillars for implementing the Financial Sector Development Program (FSDP) objectives to boost economic growth and diversify the economy.

DISCLAIMER

This Investor Bulletin document (the "Document") may contain

certain forward-looking statements relating to the performance, results of operations, plans, directions and strategies of Saudi Tadawul Group Holding Company (the "Group"). Such forward-looking statements are not based on historical facts. All the information contained in this Document is provided for general use only and does not constitute or form part of any invitation or inducement to engage in any investment activity, nor does it constitute an offer or invitation or recommendation to buy, sell, or subscribe for any securities in the Kingdom of Saudi Arabia, or an offer or invitation or recommendation in respect of buying, selling or subscribe for any securities of the Group.

The Group does not provide any warranty, express or implied, and no reliance should be placed by any person or any legal entity for any purpose on any of the information contained in this Document, or its clarity, validity, accuracy, completeness, or content.

This Document may contain statements that are, or may be deemed to be, "forward-looking statements" with respect to the Company's financial position, results of operations, and business. All Information on the Company's plans, expectations, assumptions, objectives, purposes, and beliefs are for identity purposes only and does not constitute or form part of any invitation or inducement to engage in any investment activity, nor does it constitute an offer or invitation or recommendation to buy or sell or subscribe for any securities in any country, or an offer or invitation or recommendation in respect of buying, selling or subscribe for any securities of the Group.

That forward-looking statements are not guarantees of future performance, and actual results may differ materially or immaterially from those indicated in this Document as a result of a number of factors, including, without limitation:

For further details on risk factors, please refer to the Group's

Annual Report and periodic reports available on the Investor Relations page of the Saudi Tadawul Group website.

Reports and Publications - Investor Relations Page

That forward-looking statements are made based on information available as of the date of this Document. Any information contained in this Document may be amended, whether materially or non-materially, without prior notice by the Group. The Group is not obligated to amend or update the current information contained in this Document in the event of any change.

This Document may include certain financial or operational measures not included in International Financial Reporting Standards (IFRS), which are provided as supplementary information to enhance understanding of the Group's performance from a management perspective. These measures should not be considered a substitute for financial measures prepared in accordance with IFRS. Definitions of these measures and their equivalence to IFRS measures are provided in the Definitions section of this Document.

The financial information contained in this Document relating to the Group is derived from the Group's consolidated financial statements for the year ended 31 December 2025, prepared in accordance with International Accounting Standard (34) as adopted in the Kingdom of Saudi Arabia, in addition to other standards and publications issued by the Saudi Organization for Certified Public Accountants.

Certain figures in this Document have been converted using a fixed exchange rate of $1.00 = ^ 3.75. Some figures may not precisely match the totals presented due to rounding, and percentages may not fully reflect absolute values.

Regulatory developments in the Saudi financial market or global financial markets.

Levels of activity in the Saudi financial market and daily trading volumes.

The macroeconomic environment, both domestically and globally.

Competition in the financial market infrastructure and technology services sector.



Operational and technical risks, including cybersecurity and business continuity.

Changes in the preferences of domestic and international investors.

Risks associated with third parties providing services to the Group or its subsidiaries.

YE 2025

SAUDI TADAWUL GROUP HOLDING COMPANY

(A Saudi Joint Stock Company)

Consolidated Financial Statements

For the year ended 31 December 2025

SAUDI TADAWUL GROUP HOLDING COMPANY

(A Saudi Joint Stock Company) CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2025

PAGES

1-5

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 6

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 7

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 8

CONSOLIDATED STATEMENT OF CASH FLOWS

9 10

11 58

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

ERNST & YOUNG PROFESSIONAL SERVICES (PROFESSIONAL LLC)

Paid-Up Capital: 5,500,000 (Five Million Five Hundred Thousand Saudi Riyals)

Head Office

Financial Boulevard 3126, Al Aqeeq Dist. 6717, Riyadh 13519 KAFD 1.11 B, South Tower, 8th Floor

P.O. Box 2732, Riyadh 11461 Kingdom of Saudi Arabia

C.R. No. 1010383821

Unified No. 7000117205

Tel: +966 11 215 9898

+966 11 273 4740

Fax: +966 11 273 4730

ey.ksa@sa.ey.com ey.com

INDEPENDENT AUDITOR'S REPORT

TO THE SHAREHOLDERS OF SAUDI TADAWUL GROUP HOLDING COMPANY

(A SAUDI JOINT STOCK COMPANY)

Opinion

We have audited the consolidated financial statements of Saudi Tadawul Group Holding Company, (the "Company") and its subsidiaries (the "Group"), which comprise the consolidated statement of financial position as at 31 December 2025, and the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2025, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting Standards that are endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements that are endorsed by the Saudi Organization for Chartered and Professional Accountants.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing that are endorsed in the Kingdom of Saudi Arabia. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) that is endorsed in the Kingdom of Saudi Arabia, as applicable to audit of consolidated financial statements of public interest entities. We have fulfilled our other ethical responsibilities in accordance with that Code. 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 consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming auditor's 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.

INDEPENDENT AUDITOR'S REPORT

TO THE SHAREHOLDERS OF SAUDI TADAWUL GROUP HOLDING COMPANY

(A SAUDI JOINT STOCK COMPANY) (CONTINUED)

Key Audit Matters (continued)

We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the consolidated financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated 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 accompanying consolidated financial statements.

Key audit matter How our audit addressed the key audit matter

Revenue recognition

Revenue is key element of consolidated financial statements due to its materiality and is a key metric for the user of the Group's consolidated financial statements. Due to its scale and significance to the consolidated financial statements revenue recognition is determined as key audit matter.

The Group has recognised revenue of SR 1,261 million for the year ended

31 December 2025 (2024: SR 1,446

million).

The Group's revenue comprises of trading services, listing services, technology and information services, membership services and post-trade services. The recognition of certain revenue streams is automated while others revenue streams is through manual processing, therefore, controls around revenue recognition process are critical for correct recognition of revenue.

Refer to note 3.16 for the accounting policy related to revenue recognition and note 24 for the related disclosure.

Our audit procedures performed included, among others, the following:

− Obtained our understanding of the revenue recognition process including the recording of the different revenue streams;

− Tested design and implementation of relevant key controls around the revenue recognition process including the recognition of revenue streams;

− Involved our IT specialists to test the operating effectiveness of general IT controls and IT application controls around the revenue recognition of trading services, technology and information services and major post-trade services (clearing, settlement and trading related custody services);

− Performed recalculation of revenue recorded from trading services, listing fees (annual) and part of post-trade services (in relation to trading activity);

− For a sample of transactions, we performed test of details to verify that the revenue recorded from listing fees, technology and information services and other post-trade services exists and is accurate through vouching to sales invoices;

− Evaluated the accounting policies around the recognition of revenue under each revenue stream to determine if the recognition meets the point in time or over the period revenue recognition criteria; and

− Assessed the appropriateness of the presentation and disclosures in the consolidated financial statements with respect to revenue and the relevant accounting policies.

INDEPENDENT AUDITOR'S REPORT

TO THE SHAREHOLDERS OF SAUDI TADAWUL GROUP HOLDING COMPANY

(A SAUDI JOINT STOCK COMPANY) (CONTINUED)

Other information included in The Group's 2025 Annual Report

Other information consists of the information included in the Group's 2025 Annual Report and Investor Bulletin other than the consolidated financial statements and our auditor's report thereon. We obtained 2025 Investor Bulletin, prior to the date of our auditor's report, and we expect to obtain The Group's 2025 Annual Report after the date of our auditor's report. Management is responsible for the other information.

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

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the date of the auditor's report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards that are endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements that are endorsed by the Saudi Organization for Chartered and Professional Accountants and the applicable provisions of the Regulations for Companies and Company's By-laws, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance i.e. the Audit Committee is responsible for overseeing the Group's

financial reporting process.

INDEPENDENT AUDITOR'S REPORT

TO THE SHAREHOLDERS OF SAUDI TADAWUL GROUP HOLDING COMPANY

(A SAUDI JOINT STOCK COMPANY) (CONTINUED)

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated 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 International Standards on Auditing that are endorsed in the Kingdom of Saudi Arabia 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 consolidated financial statements.

As part of an audit in accordance with International Standards on Auditing that are endorsed in the Kingdom of Saudi Arabia, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated 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.

• Obtain an understanding 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 Group's internal control.

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

• 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 Group'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 consolidated 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 Group to cease to continue as a going concern.

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

  
  
  
  
  

  Shape the future with confidence

  INDEPENDENT AUDITOR'S REPORT

  TO THE SHAREHOLDERS OF SAUDI TADAWUL GROUP HOLDING COMPANY (A SAUDI JOINT STOCK COMPANY) (CONTINUED)

  Auditor's Responsibilities for the Audit of the Consolidated Financial Statements (continued)

• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the group as a basis for forming an opinion on the consolidated financial statements. We are responsible for the direction, supervision and review of the audit work performed for the purposes of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with qovernance 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 reqardinq independence, and to communicate with them all relationships and other matters that may reasonably be thouqht to bear on our independence, and where applicable, actions taken to eliminate threats or safequards applied.

From the matters communicated with those charged with governance, we determine those matters that were of most siqnificance in the audit of the consolidated 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 outweiqh the public interest benefits of such communication.

for Ernst & ssional Services

Waleed G. Tawfiq

Certified Public Accountant License No. 437

Riyadh: 13 Ramadan 1447H (2 March 2026)

SAUDI TADAWUL GROUP HOLDING COMPANY 6

(A Saudi Joint Stock Company)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2025

(Saudi Arabian Ripple)

SAUDI TADAWUL GROUP HOLDING COMPANY 7

(A Saudi Joint Stock Company)

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 3^ December 2025

(Saudi Arabian Riya/s/

For the year ended 31 December

The accompanying notes from (1) through ( 0) form an integral part of these conso idated financial statements.

Grou|s Chief Financial Nicer Group Chief Executive Ollicer ChairPers on

SAUDI TADAWUL GROUP HOLDING COMPANY

(A Saudi Joint Stock Company)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2025

(Saudi Arabian Riyals)

Equity attributable to the ordinary shareholders of the parent company

Share capital

Other reserve

Retained earnings

Sub-total

Non-controlling

interests

Total equity

The accompanying notes from (1) through (40) form an integral part of these consolidated financial statements.

Crou|o Chief Financial Olticer Ciroup Chief Executive Olticer

SAUDI TADAWUL GROUP HOLDING COMPANY

(A Saudi Joint Stock Company)

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 Decem ber 2025

{Saudi Arabian Piya/sJ

Cash flows from operating activities

Fortheyearended34December 2025 2024

Profit before zakat for the year

Adjustments to reconcile profit before zakot for the year to net cash

generated From operating activities:

453, 84,Q43

680,719,382

SAUDI TADAWUL GROUP HOLDING COMPANY 10

(A Saudi Joint Stock Company)

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

For the year ended 31 December 2025

(Saudi Arabian Riyals)

Notes For the year ended 3t December

The accompanying notes from (1) through (40) form an integral part of these consolidated financial statements.

'f

Grou|o Chief Financial Oliicer Grou|o Chief Executive Oliicer

SAUDI TADAWUL GROUP HOLDING COMPANY 11

(A Saudi Joint Stock Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2025

(Saudi Arabian Riyals)

1. GENERAL

Saudi Tadawul Group Holding Company

(the Company ) is a Saudi joint stock company registered in the Kingdom of Saudi Arabia under Commercial Registration number 1010241733 (unified

identification number 7001537906) dated 2/12/1428 H (corresponding to 12 December 2007). The Company was established by the Royal Decree no. M/15 dated 01/03/1428 H (corresponding to 20 March 2007) and the Ministry of Commerce resolution no. 320/k dated 1/12/1428 H (corresponding to 11 December 2007).

The Company was wholly owned by the Government of the Kingdom of Saudi

). On 8 December, 2021 the Company completed its Initial Public

through PIF sold 30% of their stake representing 36 million ordinary shares. On 13 November 2022, PIF sold an additional 10% of their stake representing 12 million ordinary shares. Accordingly, PIF now holds 60% (31 December 2024: 60%) of the share capital. As at 31 December 2025, the authorized, issued and fully paid-up share capital of the Company is SAR 1,200 million (31 December 2024: SAR 1,200 million) divided into 120 million shares (31 December 2024: 120 million shares) of SAR 10 each.

companies in which it owns shares, investing its funds in shares and other securities owning real estate and other properties in connection with its businesses, granting loans, guarantees and financing to its subsidiaries, and owning and leasing industrial property rights to its subsidiaries or other companies.

On 7 May 2023, 51% shareholding in Direct Financial Network Company ( DFN ) was acquired by the Group through one of its subsidiary, Wamid ) refer note 1.1. On 15 December 2024, the Group announced a development regarding the acquisition through one of its wholly owned subsidiary, Wamid which already held 51% shares in Direct Financial Network Company (DirectFN Limited), by announcing the acquisition of 49% of the entire remaining shares in Direct Financial Network Company (DirectFN Limited) for a value of SAR 220,500,000 in accordance with the terms of agreement. On 3 February 2025 (corresponding to Shaban 4th, 1446 AH) the Group announced the completion of the regulatory requirements of the transaction and hence the acquisition was completed and its impact is reflected in the consolidated financial statements.

The Group has established a new wholly owned subsidiary (a Limited Liability

authorized share capital of SAR 35 million registered in the Kingdom of Saudi Arabia under Commercial Registration number 1010980736 dated 25/7/1445 H (corresponding to 6 February 2024).

objective is to fully hold investment in another subsidiaries, including in the new wholly owned subsidiary (a Limited Liability Company) called

with the authorized share capital of SAR 25 million registered in the Kingdom of Saudi Arabia under Commercial Registration number 1009014645 dated 8/10/1445 H (corresponding to 17 April 2024). TFIC is

On 26 June 2024 (corresponding to 20 Dhu Al-Hijjah 1445 AH), Group through one of its subsidiary (TFIC) acquired 32.6% shareholding of Gulf Mercantile Exchange Limited (GME) (formerly called Dubai Mercantile Exchange

DME), a company incorporated in Bermuda on 21 April 2005. GME provides an electronic financial market to facilitate trading, clearing and settlement of a range of energy financial instruments. It also provides a set of ancillary services similar to those of other financial exchanges to help p Refer note 1 and 6.3.

and equity accounted investments (given in note 1.1 and 1.2) is to provide a listing service, create and manage the mechanisms of trading of securities, providing depository and registration services for securities ownership, clearing of securities trades, dissemination of securities information, provide financial technology solutions and financial content and innovative capital market solutions and products for stakeholders and engage in any related other activity to achieve the objectives as defined in the Capital Market Law.

SAUDI TADAWUL GROUP HOLDING COMPANY 12

(A Saudi Joint Stock Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2025

(Saudi Arabian Riyals)

1. GENERAL (CONTINUED)

   These consolidated financial statements comprise of the financial statements of the Company and its subsidiaries (collectively

   
   
   
   
   

   office address is as follows:

   Tadawul Tower, building no. 3229 Financial Boulevard (KAFD) Riyadh 13519

   Kingdom of Saudi Arabia

   :

   
   
   

   1.1

   Name of subsidiaries	Country of incorporation and legal status	Commercial registration dated	Business activities	Effective ownership December December 2025 2024		Paid up share capital
   Securities	Kingdom of Saudi	27/11/1437 H	Depository and	100%	100%	400,000,000
   Depository Center	Arabia, Closed Saudi	(corresponding to 30	registration of
   Company ( )	Joint Stock	August 2016 G)	securities
   	Company
   Securities Clearing	Kingdom of Saudi		Clearing services of	100%	100%	600,000,000
   Center Company	Arabia, Closed Saudi	02/06/1439 H	securities
   ( )	Joint Stock	(corresponding to 18
   	Company	February 2018 G)
   Saudi Exchange	Kingdom of Saudi		Listing and trading of	100%	100%	600,000,000
   Company	Arabia, Closed Saudi	17/08/1442 H	securities, market
   	Joint Stock	(corresponding to 31	information
   	Company	March 2021G)	dissemination
   Tadawul Advance	Kingdom of Saudi		Financial technology	100%	100%	75,000,000
   Solution Company	Arabia, Closed Saudi	11/02/1442 H	solutions, innovative
   ( )	Joint Stock	(corresponding to 28	capital market
   	Company	September 2020 G)	solutions for
   			stakeholders
   Tadawul Investment Holding Company	Kingdom of Saudi Arabia, Limited Liability Company	25/07/1445 H (corresponding to 6 February 2024 G)	Holding company for other subsidiaries to be used for planned investments in associates and joint ventures	100%	100%	35,000,000
   Tadawul First Investment Company owned by TIH	Kingdom of Saudi Arabia, Limited Liability Company	8/10/1445 H (corresponding to 17 April 2024)	Investment vehicle for investment in GME Limited.	100%	100%	25,000,000
   Direct Financial	Kingdom of Saudi	16/09/1426 H	Develops financial	100%	51%	500,000
   Network Company	Arabia, Saudi	(corresponding to 19	technology and
   (DFN) owned by	Limited Liability	October 2005)	financial content for
   Wamid	Company		stakeholders

   DFN has following subsidiaries that are involved in developing financial technology and financial content for stakeholders:

   Name of subsidiaries	Country of incorporation	Effective ownership 2025	Effective ownership 2024
   Direct Financial Network ME Dubai Multi Commodities Center	United Arab Emirates	100%	100%
   DirectFN Fintech Company for wholesale of computer hardware and software	Kuwait	100%	-
   DFN Technology (Private) Limited	Sri Lanka	99%	99%
   DFN Technology Pakistan (Private) Limited	Pakistan	99%	99%
   Fintech Labs (Private) Limited	Sri Lanka	49%	49%

   
   
   

   SAUDI TADAWUL GROUP HOLDING COMPANY 13

   (A Saudi Joint Stock Company)

   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

   For the year ended 31 December 2025

   (Saudi Arabian Riyals)

   1. GENERAL (CONTINUED)

      
      
      

      1.2 Details of the equity accounted investments:

      Name of companies	Country of incorporation and legal status	Commercial registration dated	Business activities	Ownership, direct and effective December December 2025 2024		Paid up share capital
      Tadawul Real Estate Company ( )	Kingdom of Saudi Arabia, Limited Liability Company	22/02/1433 H (corresponding to 17 January 2012 G)	Buying, selling, renting, managing and operating real estate facilities	33.12%	33.12%	1,280,000,000
      Regional Voluntary Carbon Market Company C	Kingdom of Saudi Arabia, Closed Joint Stock Company	28/03/1444 H (corresponding to October 2022 G)	Active market and Auction for Carbon Credits	20%	20%	400,000,000
      Gulf Mercantile Exchange Limited formerly called Dubai Mercantile Exchange (DME)	Bermuda, Limited Liability Company	12/3/1426 H (corresponding to 21 April 2005 G)	Electronic financial market to facilitate trading, clearing and settlement of a range of energy financial instruments	32.6%	32.6%	328,006,200

   2. BASIS OF PREPARATION

      1. Statement of compliance

         These consolidated financial statements have been prepared in accordance with the IFRS Accounting Standards as endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements that are endorsed by Saudi Organization for Chartered and Professi

         Companies in the Kingdom of Saudi Arabia and the By-laws of the Company.
         
         

      2. Basis of measurement

         These consolidated financial statements have been prepared on historical cost basis, except for financial assets and liabilities

         
         
         

         -of-service benefits which

         are measured at the present value of future obligations using projected unit credit method.

      3. Functional and presentation currency

         
         
         

         presentational currency of the Group and its subsidiaries and associates. All amounts have been rounded to the nearest SAR. For each subsidiary and equity accounted entities, the Group determines the functional currency and items included in the financial statements of each entity are measured using the functional currency.

      4. Basis of consolidation

         These consolidated financial statements comprise the financial statements of Saudi Tadawul Group Holding Company and

         
         
         

         achieved when the Group is exposed to or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

         • power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);

         • exposure, or rights, to variable returns from its involvement with the investee; and

         • the ability to use its power over the investee to affect its returns.

           Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

         • the contractual arrangement with the other vote holders of the investee;

         • rights arising from other contractual arrangements; and

   
   
   

   -​

   
   
   

   SAUDI TADAWUL GROUP HOLDING COMPANY 14

   (A Saudi Joint Stock Company)

   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

   For the year ended 31 December 2025

   (Saudi Arabian Riyals)

2. BASIS OF PREPARATION (CONTINUED)

   1. Basis of consolidation (continued)

      The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group obtains control until the date the Group ceases to control the subsidiary.

      
      
      

      Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line

      -group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

      A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group losses control over a subsidiary, it derecognizes the related assets (including goodwill), liabilities, non-controlling interest and other components of equity while any resultant gain or loss is recognized in the consolidated statement of income. Any investment retained is recognized at fair value.

   2. Current versus non-current classification

      The Group presents assets and liabilities in the statement of financial position based on current / non-current classification. An asset is classified as current when:

      • expected to be realized or Intended to be sold or consumed in the normal operating;

      • held primarily for the purpose of trading;

      • expected to be realized within twelve months after the reporting period; or

      • cash or cash equivalent, unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

        All other assets are classified as non-current. A liability is current when:

      • it is expected to be settled in the normal operating cycle;

      • it is held primarily for the purpose of trading;

      • it is due to be settled within twelve months after the reporting period; or

      • there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. The Group classifies all other liabilities as non-current.

   3. New standards and amendments issued

      Standards and amendments adopted as of 1 January 2025

      The accounting policies adopted in the preparation of the consolidated financial statements are consistent with those followed

      
      
      
      
      

      4, and the adoption of new standards effective as of 1 January 2025. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. The International Accounting Standards Board (IASB) has issued following accounting standards, amendments, which were effective from periods on or after January 1, 2025. The

      
      
      

      - Amendments to IAS 21 Lack of exchangeability Standards and amendments issued and not yet effective

      The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the

      
      
      

      standards and interpretations, if applicable, when they become effective and not expected to have material impact on the Group.

      
      
      

      SAUDI TADAWUL GROUP HOLDING COMPANY 15

      (A Saudi Joint Stock Company)

      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

      For the year ended 31 December 2025

      (Saudi Arabian Riyals)

      1. BASIS OF PREPARATION (CONTINUED)

         1. New standards and amendments issued (continued)

            Effective for annual financial periods beginning on or after	Standard, amendment or interpretation	Summary of requirements
            1 January 2026	Annual Improvements to IFRS Accounting Standards	Clarification and amendments relating to various IFRSs under annual improvement program.
            1 January 2027	IFRS 18 Presentation and Disclosure in Financial Statements	New requirements on presentation within the statement of profit or loss, including specified totals and subtotals. It also requires disclosure of management-defined performance measures and includes new requirements for aggregation and disaggregation of financial information based on the identified 'roles' of the primary financial statements (PFS) and the notes. The Group is currently working to identify all impacts the amendments will have on the primary consolidated financial statements and notes to the consolidated financial statements.
            1 January 2027	IFRS 19 - Subsidiaries without Public Accountability: Disclosures	In May 2024, the Board issued IFRS 19 Subsidiaries without Public Accountability: Disclosures (IFRS 19), which allows eligible entities to elect to apply reduced disclosure requirements while still applying the recognition, measurement and presentation requirements in other IFRS accounting standards. Unless otherwise specified, eligible entities that elect to apply IFRS 19 will not need to apply the disclosure requirements in other IFRS accounting standards.
            1 January 2026	Amendments to IFRS 9 and IFRS 7 - Classification and Measurement of Financial Instruments	Clarifies derecognition of financial liabilities on and settled through electronic payment system before settlement date with certain conditions, clarifies contractual cash flows characteristic linked with environmental, social and governance (ESG) features ,clarifies treatment of non-recourse assets and contractually linked instruments, require additional disclosures financial assets and liabilities with contractual terms that reference a contingent event (including those that are ESG-linked), and equity instruments classified at fair value through other comprehensive income.
            Effective date deferred indefinitely	Amendments to IFRS 10 and IAS 28 - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture	Sale or contribution of Assets between an Investor and its Associate or Joint Ventures.

         2. Critical accounting estimates and judgments

      The preparation of these consolidated financial statements in conformity with the International Financial Reporting Standards

      
      
      

      that affect the application of accounting policies and the reported amounts of assets, liabilities, profit 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 in the period in which the estimates are revised and in any future periods affected. Information about material assumptions and estimation uncertainties are included in:

      
      
      

      SAUDI TADAWUL GROUP HOLDING COMPANY 16

      (A Saudi Joint Stock Company)

      NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

      For the year ended 31 December 2025

      (Saudi Arabian Riyals)

      2. BASIS OF PREPARATION (CONTINUED)

   4. Critical accounting estimates and judgments (continued)

      
      
      

      • -of-service benefits: The costs of defined benefit plans are determined using actuarial valuations. The actuarial valuation involves making assumptions, which are reviewed annually. Key assumptions include discount rates, future salary increases, employee turnover, mortality rates and retirement age. Due to the complexity of the valuation, the underlying assumptions and the long-term nature of these plans, such estimates are subject to significant uncertainty. Information about amounts reported in respect of defined benefit plans, assumptions applicable to the plans and their sensitivity to changes are presented in note 15.

      • Allowance for expected credit losses: Allowance of expected credit losses are probability-weighted estimate of credit losses. Loss rates are calculated using "roll rate" method based on the probability of a trade debt progressive through successive stages of delinquency to calculate the weighted average loss rate. The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. (Note 3.6)

      • 
        
        

        calculating amortization. This estimate is determined after considering the expected future cash generation from the software. The Group management reviews the residual values and useful lives annually and future amortization charges would be adjusted where management believes the useful lives differ from previous estimates.

      • Impairment of intangible assets: The Group assesses at each reporting date whether there is any indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate

        
        
        

        or cash- costs to sell and its value in use and is determined for an individual asset or CGU, unless the asset or CGU does not generate cash inflows that are largely independent of those from other assets or group of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset or CGU is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects the current market assessment of the time value of money and the risks specific to the assets or CGU. The management does not believe there is any impairment in the value of intangible assets at year-end.

        
        
        

      • Impairment of non-financial assets: An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of

        s or observable market prices less incremental costs of disposing of the asset. The value in use calculation is based on a discounted cash flow model (DCF). The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the performance of the assets of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to goodwill recognized by the Group. The key assumptions used to determine the recoverable amount are disclosed and further explained in Note 5.

      • Capitalization of software development costs: The Group capitalizes cost for software development projects. Initial capitalization

        
        
        

        development project has reached a defined milestone according to an established project management model. In determining the amounts to be capitalized, management makes assumptions regarding element of directly attributable costs, expected future cash generation of the project and the expected period of benefits

      • Revenue recognition on time or over period of time refer note 3.17

      • Going concern: The Group's management has made an assessment of the Group's ability to continue as a going concern and is satisfied that the Group has the resources to continue the business for the foreseeable future. Furthermore, the management is not aware of any material uncertainties that may cast a significant doubt about the Group's ability to continue as a going concern. Therefore, the consolidated financial statements continue to be prepared on a going concern basis.

      • Fair value of derivative liability: The fair value of put options granted is estimated at the reporting date using a Monte-Carlo simulation model, considering the terms and conditions on which the put options agreement. The model simulates the total shareholder return and compares it against the group of principal competitors. It considers historical and expected dividends, and the share price volatility of the entity relative to that of its competitors so as to predict the share price.

        
        
        

        SAUDI TADAWUL GROUP HOLDING COMPANY 17

        (A Saudi Joint Stock Company)

        NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

        For the year ended 31 December 2025

        (Saudi Arabian Riyals)

3. MATERIAL ACCOUNTING POLICIES

The material accounting policies adopted in the preparation of these consolidated financial statements are set out below.

Purchased intangible assets are initially recognized at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. These assets are amortized on a straight-line basis over their useful economic lives of 7 to 20 years.

Work-in-progress is stated at cost until the development of software is complete and installed. The software is developed by

attributable to development and installation are capitalized to the intangibles. No amortization is charged on work-in-progress.

Internally generated intangibles are composed of expenditure incurred on internal product development which is capitalized if the costs can be reliably measured; the product or process is technically and commercially feasible; future economic benefits are probable; and the Group has sufficient resources to complete the development and to use or sell the asset. The assets are initially recorded at cost, which includes labor and, directly attributable costs. Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. These intangible assets when under work-in-progress are stated at cost and not amortized until they are ready for their intended use. Once available for the intended use, they are then amortized over their useful economic lives of 7 to 20 years.

An intangible asset is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss.

ve