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ASA International Group plc
Annual Report and Accounts 2023
Pathways
to progress
Financial Statements Additional InformationGovernance Report
Strategic Report
Who we are
ASA International is
one of the world’s largest
international microfinance
institutions providing
small, socially responsible
financial services to
low‑income entrepreneurs,
most of whom are women,
across Asia and Africa.
ASA International has a premium listing on the main
market of the London Stock Exchange.
Visitourwebsiteformoreinformation
www.asa-international.com
Strategic Report
01 An overview of 2023
02 Purpose-led framework
06 Company overview
08 Chairman’s statement
09 Our investment case
10 ChiefExecutiveOfficer’s
review
12 Business model
14 Section172statement
17 Ourstrategy
20 Feature story
–Our clients
21 Feature story
–Our communities
23 Feature story
–Our colleagues
24 Key Performance
Indicators
25 Financial review
37 Riskmanagement
39 Principal risks
48 ESG report
49 Alignmentwith
UN SDGs
50 Socially responsible
51 Protectingourclients
52 Supportingour
colleagues
54 Our community
programmes
56 Environmentally
responsible
57 Mitigationofemissions
57 Adaptationto
climate change
58 Task Force on
Climate-related
FinancialDisclosures
(‘TCFD’)
64 2023 Streamlined
EnergyandCarbon
Reporting(‘SECR’)
66 Non-financial
and sustainability
information statement
Governance Report
68 Chairman’sintroduction
69 BoardofDirectors
70 ExecutiveCommittee
71 CountryHeads
72 Boardactivities
73 Leadershipfromthe
Board
75 Governanceframework
79 AuditandRisk
Committeereport
84 NominationCommittee
report
87 Remuneration
Committeereport
97 IndependentDirectors’
Committeereport
97 DisclosureCommittee
report
98 Directors’report
Financial Statements
101 Generalinformation
102 Independent auditor’s
report
110 Consolidated income
statement and statement
of comprehensive income
111 Consolidated statement
offinancialposition
112 Consolidated statement
ofchangesinequity
113 Consolidated statement
ofcashflows
114 Notes to the consolidated
financialstatements
168 Statutory statement
of profitorlossandother
comprehensive income
168 Statutory statement
of financialposition
169 Statutory statement
of changesinequity
169 Statutory statement
of cashflows
170 Notestothestatutory
financialstatements
Additional Information
172 Alternativeperformance
measures
174 Listofabbreviations
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Financial Statements Additional InformationGovernance Report
Strategic Report
An overview of 2023
Recognition
ASA Tanzania:
• Champion African Company of the Year
in Financial Services to Vulnerable Groups.
• Best Microfinance Provider of the Year 2023
at Africa Company of the Year Awards.
ASA Ghana:
• Best Microfinance Methodology and
Highest Outreach in Rural Areas
Find all the awards we received in 2023
on our website www.asa-international.
com/about-us/our-awards/
• ASA International Group plc (‘ASA International’,
the ‘Company’ or the ‘Group’) disbursed a total
of USD 965.1 million in loans, serving 2.3 million
clients.
• Pakistan, the Philippines, Ghana, Tanzania, and
Kenya made significant positive contributions
to the Group’s net profitability, due to increased
loan demand and high loan portfolio quality in all
these markets.
• Realised a net profit of USD 8.8 million.
• PAR>30 for the Group improved to 2.1%,
primarily due to write-offs of long overdue loans
in India and Myanmar, combined with growth in
Outstanding Loan Portfolio (‘OLP’) in USD terms
in other major countries.
• Received approval for ‘Commencement of
Microfinance Banking Business‘ on 13 November
2023 in Pakistan.
• Completed implementation of Core Banking
System (‘CBS’) in Pakistan in Q1 2024 and
continued implementation of CBS in Ghana.
• Rolled out the digital market place for clients and
their suppliers, called the Supplier Market Place
(‘SMP’), in Ghana.
• Made strides in setting and achieving climate and
Diversity, Equity and Inclusion (‘DEI’) targets.
Read more FY 2023 highlights on page 25
Approval of Strategic Report
The Strategic Report for the year ended
31 December 2023, set out on pages 01 to 67, was
approved by the Board of Directors on 26 April 2024.
By order of the Board,
Karin Kersten
Chief Executive Officer,
ASA International Group plc
26 April 2024
Progress with purpose
Clients
2.3m
2022: 2.3m
2021: 2.4m
Branches
2,016
2022: 2,028
2021: 2,044
Profit before tax (USD)
32.2m
2022: 46.3m
2021: 25.7m
Outstanding Loan Portfolio (USD)
369.2m
2022: 351.2m
2021: 403.7m
Net profit (USD)
8.8m
2022: 17.9m
2021: 6.4m
PAR>30 days
2.1%
2022: 5.9%
2021: 5.2%
Highlights
Find the impact highlights on page 13
ContentsBack
01 ASA International Group plc
Annual Report and Accounts 2023
Financial Statements Additional InformationGovernance Report
Strategic Report
Our vision:
Just and financially
inclusive societies.
Our purpose…
See our purpose in action on page 20
To reduce
poverty and
enable female
empowerment
Our mission:
Enhancing socioeconomic progress
of low-income entrepreneurs by
increasing financial inclusion.
Inspired by…
Achieved through…
Purpose-led framework
ContentsBack
02 ASA International Group plc
Annual Report and Accounts 2023
Financial Statements Additional InformationGovernance Report
Strategic Report
Financial inclusion is strengthened
by increasing loan coverage and
loan volumes.
A digital channel complements
the high-touch model and
efficiency is improved through
digitising internal processes.
Offering digital and value-added
products and services, including
the Supplier Marketplace (‘SMP’)
app attracts new clients. Banking
licences are prerequisites for
broadening products and services.
70%
of clients accessing a financial
service for the first time
94%
of clients increasing their
daily income level
89%
increase of share in family
income by females
94%
understanding of financial
management improved
94%
living conditions
improved
82%
increase of leadership or
decision-making role within
household or community
Purpose-led framework continued
Our outcome indicators:
Our strategic priorities:
Measured through…
Supported by…
Financial inclusion Reduction of poverty Female empowerment
Read about our business Key Performance Indicators (‘KPIs’) on page 24
Read more about how these indicators are calculated in the APM table on pages 172 and 173
Read more about our growth strategy on page 17
Increase financial
inclusion
Add digital
channel and digitise
internal processes
Offer digital
products and
services
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03 ASA International Group plc
Annual Report and Accounts 2023
Financial Statements Additional InformationGovernance Report
Strategic Report
Our business model:
• Decentralised, standardised and sustainable
model allowing for cost efficiency, quick
decision- making and replicability.
• Meeting basic demand for savings and loans
and over time digital financial services.
Read more about our business model on page 12
Purpose-led framework continued
Read more in our ESG report on page 48
Our sustainable practices and
responsible business operations:
• Socially and environmentally responsible.
• Taking steps to mitigate climate change by
defining metrics and targets.
• Alignment to Sustainable Development Goals
(‘SDGs‘), contributing directly to SDG 1, 5, 8, 9
and 10.
Delivered via…
Committed to…
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04 ASA International Group plc
Annual Report and Accounts 2023
Financial Statements Additional InformationGovernance Report
Strategic Report
Embraces a supportive environment
that encourages collaboration and
knowledge sharing, empowering
all team members to achieve
common goals.
Emphasises responsible,
reliable and accountable
leadership. It promotes efficient
operations, ownership of
roles and continuous learning.
Embodies consistency, trust,
transparency, respect and
equality. It involves upholding
high moral standards and
treating others fairly.
Purpose-led framework continued
Our investment case:
• Socially responsible services
• Diversified risk profile
• Proven credit methodology
• Highly scalable
Read more about our investment case on page 09
Our stakeholders
Driven by…
Regulators and industry bodies
92
Number of regulators and industry bodies
associated with across the Group.
Read more about our stakeholders, benefits and engagement on pages 13 and 14
Shareholders and investors
53.7%
Percentage of public float.
Clients
2.3m
Colleagues
13.4k
Communities where we operate
2,016
Number of branches which are situated in
communities where clients live and work.
Countries of operations
13
Underpinned by…
Our values:
Teamwork Professionalism Integrity
Read more about how our values are showcased on pages 20 to 23
Reinforcing…
05 ASA International Group plc
Annual Report and Accounts 2023
ContentsBack
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Strategic Report
ASA International is a
microfinance institution
with operations in Asia
and Africa.
Our clients are engaged in services, trading,
manufacturing and agricultural business activities.
Our clients
The Group’s clients are low-income mostly female
micro-entrepreneurs who are over 18 years of age
and earn on average around USD 3.65 per day.
They generally cannot access credit from traditional
banks to start or grow their businesses. Clients are
active across services, trading, manufacturing and
small scale agricultural activities in predominantly
urban/semi-urban areas.
The Company engages with them through frequent
client group meetings and at the branches, which are
situated in or near the communities where its clients
live and work, and are the centre of the clients’
ecosystem. The Company targets approximately
1,200 clients per branch.
Our colleagues
The Company employs 13,433 staff members,
most of whom start post-graduation with ASA
International as their first employer. The local field
staff are trained in-house and work alongside highly
skilled senior managers who offer on-the-job
coaching and mentoring. They are eligible for
promotion to more senior positions over time.
The Company’s operating procedures require
staff to provide services in a responsible manner
and prevent inadvertent over-borrowing by clients.
In the Group’s risk control framework, branch staff
and area, regional and district managers form a key
part of the first line of defence at the field level and
are responsible for client retention and credit risk
management.
Read more about colleagues on page 52
Our products and services
The Company provides small socially responsible
loans, without joint liability, for primarily income-
generating activities. The operating subsidiaries
offer various collateral-free loans to start or grow
businesses, often including small business/SME
loans. The average disbursement of the bulk of the
loans (six to twelve-month loans) is USD 266. In
principal, only when a loan has been fully repaid are
clients eligible to apply for a new loan, based on an
assessment of client needs, creditworthiness and
business potential. Exceptions may apply for high
performing clients. There is a maximum increment
and loan limit for each loan cycle, including follow-
on loans. These follow-on loans are, on average,
20% to 50% larger than the previous loan. Where
it is customary and allowed under the current licence,
a security deposit is taken.
The Company regularly benchmarks loan interest
rates against equivalent providers in its countries
of operation and aims to charge average market rates
that depend on the country, product and loan term.
In the countries where the Company has a deposit-
taking licence, it may offer savings, in addition
to loans. Generally, these are deposits from clients
only. Over the next few years, the Company plans
to gradually introduce digital financial services, on
a country-by-country basis, which would include
offering online loans, accounts, payments and
various savings products, and other digital value-
added services to support the growth of clients’
small businesses.
Read more about the business model on page 12
and the strategy on page 17
Clients Branches Outstanding Loan Portfolio (USD)
Find our Key Performance Indicators (‘KPIs’) on page 24
  South Asia – $117.5m
  South East Asia – $74.0m
  West Africa – $72.3m
  East Africa – $105.5m
$369.2m
  South Asia – 589
  South East Asia – 458
  West Africa – 452
  East Africa – 517
2,016
  South Asia – 842,001
  South East Asia – 444,210
  West Africa – 425,058
  East Africa – 619,229
2.3m
Company overview
06 ASA International Group plc
Annual Report and Accounts 2023
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Strategic Report
Company overview continued
Where we operate
  Corporate head offices:
Amsterdam, the Netherlands
Dhaka, Bangladesh
  Registered head office:
Worthing, West Sussex, United Kingdom
 Regional head offices
Visit our website for more information on the regulatory
environments for each of our operating countries
The Group has operations in
three countries: Nigeria, Ghana
and Sierra Leone.
Branches: 452
Nigeria: 263
Ghana: 143
Sierra Leone: 46
Read more on page 31
The Group has operations in
three countries: India, Pakistan
and Sri Lanka.
Branches: 589
Pakistan: 345
India: 180
Sri Lanka: 64
Read more on page 27
West Africa
South Asia
The Group has operations in
five countries: Tanzania, Uganda,
Kenya, Rwanda and Zambia.
Branches: 517
Tanzania: 202
Kenya: 132
Uganda: 120
Rwanda: 32
Zambia: 31
Read more on page 33
The Group has operations in
two countries: the Philippines
and Myanmar.
Branches: 458
The Philippines: 370
Myanmar: 88
Read more on page 29
East Africa South East Asia
Clients
425,058
Clients
842,001
Clients
619,229
Clients
444,210
Outstanding Loan Portfolio (USD)
$72.3m
Outstanding Loan Portfolio (USD)
$117.5m
Outstanding Loan Portfolio (USD)
$105.5m
Outstanding Loan Portfolio (USD)
$74.0m
07 ASA International Group plc
Annual Report and Accounts 2023
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Strategic Report
Chairman’s statement
The journey towards
sustainable growth
The year 2023 has been challenging
for the Group, but it can be seen
as a year of two distinct halves
with the second half showing
strong improvement and giving
us real hope for the current year
and beyond.
Early in the year, the prevailing headwinds of inflation
and currency devaluation in key countries were
stronger than we anticipated, and were compounded
by macroeconomic difficulties in Nigeria, business-
specific ones in India, and high tax rates in Pakistan.
Conditions markedly improved as the year went
on, as did our operating and financial performance.
Karin Kersten stepped into the role of CEO in
June 2023, with the overriding objective of creating
a Group that can achieve sustainable progress and
growth whatever the prevailing headwinds. We are
putting in place the management and organisational
changes required to convert this objective into
reality; all the while keeping the ASA Model and
philosophy at the heart of everything that we do
for the benefit of our clients.
Our digital strategy is at the core of our drive for
resilience and sustainability. It is gratifying that
we achieved a major milestone with the successful
migration of more than 600,000 clients in Pakistan
to our new Core Banking System in February 2024.
This gives us the confidence to move forward in
Ghana this year, and to continue preparations
in our key East African markets.
As always, on behalf of the Board, I would like
to express our sincere thanks to all our employees
for their dedication and commitment to our mission
of enhancing financial inclusion and socioeconomic
progress for our clients. Our broader leadership team
has willingly embraced the changes required to
achieve sustainable growth, whilst our staff in the
field continue to work in exemplary fashion in often
challenging circumstances. Special thanks are also
due to all our other stakeholders – our clients of
course, and also our lenders and shareholders whose
support is essential to achieving our purpose.
The Board
At the Company’s Annual General Meeting (‘AGM’)
on 15th June 2023, our co-founder Dirk Brouwer
duly stepped into his new role as Deputy Chairman
and Special Advisor, and Karin Kersten became CEO.
The Board is pleased that we can still benefit from
Dirk’s vision and expertise, and is very encouraged
by the way that Karin and the management team
are taking the Group forward.
Also at the AGM, Aminur Rashid retired from
the Board after many years of loyal service. We will
be forever grateful for his long years of dedication
and committed service to the Board and ASA
International as a whole. We wish him a long
and happy retirement.
Guy Dawson
Chairman, ASA International Group plc
26 April 2024
A year of two distinct
halves with the second
half showing strong
improvement and giving
us real hope for the
current year and beyond.”
08 ASA International Group plc
Annual Report and Accounts 2023
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Strategic Report
Our investment case
What makes us different
Socially
responsible services
Diversified
risk profile
Proven
credit methodology
Highly
scalable
Through the ASA Model of Microfinance
Through its heritage and close association with
ASA, the Association of Social Advancement,
based in Bangladesh, the Group has a long
heritage in the microfinance industry. From
inception, the Group benefited from early access
to ASA NGO Bangladesh’s know-how, industry
technical expertise and experts. The Group was
founded to adapt the ASA Model to fit the diverse
countries in Asia and Africa in which it has
established its microfinance institutions.
The ASA operating (lending) model is focused
around six distinctive features, emphasising the
Group’s social responsibility commitment
to clients and staff:
• Loans with market-based interest rates.
• Group selection without joint liability.
• Collateral-free loans with a moratorium on
loan repayments in emergency situations.
• Loans for primarily income-generating activities.
• Full repayment before qualifying for new loans
and repeat loan cycles with set limits.
• Training and development of operating staff
in-house and no bonus incentive.
Due to presence in thirteen emerging and
frontier markets
The Group’s risk profile is diversified across
thirteen markets in Asia and Africa. The impact
of principal risks on its business is different from
country-to-country, which benefits the Group.
The risk management features embedded in the
ASA Model, such as managing credit risk, have
a positive impact on the Group’s returns and risk
profile. In 2023, as a result of the inflationary
environment and currency depreciations the
liquidity, exchange rate and inflation rate risks
predominantly increased.
The addressable market is estimated at
378 million prospects in existing countries
of operation, according to the World Bank. The
Group is well placed to capture this significant
breadth of market opportunity by continuing
to increase its penetration in current as well
as in future markets in Asia and Africa.
As a result of staying close to clients
Managing credit risk is an integral part of the
Group’s operating model. Loan officers foster
close client relationships, quickly identifying
repayment or other issues, as well as disbursing
new, larger loans to qualified clients.
The client assessment and admission process may
take up to 14 days for a first cycle loan, ensuring
only clients committed and able to grow their
businesses are accepted and protecting clients
from becoming over-leveraged.
The credit methodology results in low credit
costs, which in combination with the low cost
of operations, leads to attractive financial returns.
Decentralised business model
The Group’s experienced management team
makes sure the Group executes the ASA Model
in a disciplined way across all markets. The
operations are highly standardised through the
use of an operations manual and are almost
identical across all operations. Client selection
and loan sizes are decided at branch level.
In addition to the branch model, a digital
channel will be introduced via mobile devices,
market-by-market over the coming years.
Over time, the Group aims to offer deposits
more widely and other digital financial services
in all operations, on a country-by-country basis,
depending on local demand and starting in the
operations with deposit-taking licences.
In order to be able to offer clients and the
wider public online deposits over time, which
are a low-cost way of funding, the Group aims
to obtain deposit-taking licences in all countries.
Six countries currently have obtained deposit-
taking licences.
Microfinance
experience
32yrs
Social Performance
Indicator
90%
Prospects
378m
Operating countries
13
Client retention rate
75%
PAR>30 dpd
2.1%
Deposit-taking licences
6
Return on Assets
1.8%
Dividend
Nil
Read more on page 12 of our business model
See our website for more information
on our history
Read more on pages 40 and 41
of principal risks
See our website for more information
on addressable market
Read more on how we engage with clients
on page 51 and our business model
on page 12
Read more on pages 17 to 19 of our Strategy
and our business model on page 12
09 ASA International Group plc
Annual Report and Accounts 2023
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Strategic Report
Uplifting operational
performance in H2
and beyond
Chief Executive Officer’s review
Operations returned to growth in
the second half of 2023, with the
operating environment improving
in most markets compared to the
first half of the year.
Introduction
We’ve seen a notable improvement in our operating
performance in the second half of the year, despite
operational challenges in Nigeria and Myanmar.
Our profits were significantly impacted by currency
devaluation and high inflation in some of our key
countries, including the application of hyperinflation
accounting to Ghana and Sierra Leone. The launch
of microfinance banking and the implementation
of the core banking system in Pakistan set the stage
for a pivotal transition to enhance operational
efficiency and broaden our products and services.
Business review 2023
The improvement in the operating environment
in most of our markets saw demand for our loan
products increase as clients experienced an upturn
in business activity. Against the backdrop of the
macroeconomic challenges faced in our operating
markets due to the global impact of increased food,
commodities, and energy prices, the high demand
from clients contributed to the growth of our
operations in most markets. Pakistan, the Philippines,
Ghana, Tanzania and Kenya continued to grow their
loan portfolios in local currency and each made
significant contributions to the Group’s profitability.
The number of branches remained broadly stable,
which was the result of the Group’s stated strategy
to reduce its presence in India while at the same time
increasing our branches in many other countries,
particularly in the Philippines and our operations in
East Africa. Client numbers across the Group increased
as the operating environment improved in most of our
markets. On a constant currency basis, Gross OLP
for the Group grew to USD 433.6 million at the end
of December 2023 from USD 367.5 million at the end
of December 2022. The growth in Gross OLP was
combined with improved portfolio quality in most
markets with PAR>30 for the Group at 2.1% as of
December 2023 compared to 5.9% in December 2022.
Progressing with
banking licenses
On November 13 2023, ASA Pakistan achieved
a significant milestone by securing approval
for the ‘Commencement of Microfinance Banking
Business’. This achievement represents a pivotal
moment in our organisational journey, symbolising
not only regulatory recognition but also a significant
step towards expanding our impact and reach
in Pakistan.
The acquisition of the microfinance banking
licence enables us to cater to a wider range
of clients, facilitating greater financial inclusion
and empowerment across diverse communities.
By offering a comprehensive suite of financial
products and services, including loans and
savings mobilisation, we are better positioned
to meet the evolving needs of our customers.
Moreover, the successful integration of our
Core Banking System in February 2024 lays the
essential groundwork for deposit mobilisation,
strengthening our operational capacity and
ensuring seamless service delivery. For deeper
insights into the Core Banking System, please
refer to page 19.
This milestone closely aligns with the ‘Offer
digital products and services’ pillar of our
Growth strategy.
Links to
Offer digital
products and
services
Read an excerpt of a Q&A with our
new CEO, Karin, on page 11
ContentsBack
10 ASA International Group plc
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Financial Statements Additional InformationGovernance Report
Strategic Report
Chief Executive Officer’s review continued
In India, the Group maintained its strategy to focus
on the recovery of overdue loans and the growth
of its off-book portfolio, which resulted in on-book
Gross OLP shrinking by USD 16.2 million in FY 2023.
However, overall Gross OLP in India increased by 2%
as the off-book Gross OLP increased to USD 39.8
million as of 31 December 2023 from USD 22.6
million as of 31 December 2022. This was due to new
Business Correspondence (‘BC’) partnerships which
commenced in 2023. We expect that the on-book
portfolio will also start to increase in 2024 which
should translate into a positive effect on the future
profitability of our operations in India.
In Nigeria, the operating environment became
challenging in H1 2023 due to a number of factors:
such as the national elections in February 2023,
demonetisation and also the impact of high inflation
experienced by the country following the removal of
government fuel subsidies. This resulted in a reduction
of OLP and clients, an increase in overdues, and higher
operating expenses in H1 2023. This was compounded
by significant devaluation of the Nigerian Naira (down
70% against USD as of 30 June 2023 compared to
31 December 2022) which resulted in reduced
operational and financial results in USD terms for H1
2023. Notwithstanding the headwinds experienced
during H1 2023, we saw an improvement of the
operating environment in H2 2023, which was
reflected in improved portfolio quality and profitability
and increased collections and disbursements. The
period also saw a decreased currency depreciation
(down 18% against USD as of 31 December 2023
compared to 30 June 2023). As such we expect the
operations to continue to gradually recover in 2024
and contribute positively to the Group.
In Ghana and Sierra Leone, the three-year cumulative
inflation in 2023 exceeded 100%. As a result,
hyperinflation accounting has been applied for the
first time for these two countries at the Group level.
The application of hyperinflation accounting resulted
in a non-cash decrease of the Group’s net profit of
USD 5.4 million and an increase of total equity of USD
0.6 million for the year ended 31 December 2023.
Against the backdrop of continued high inflation
and currency depreciation in many of our markets,
we continue to expect operations to improve across
the Group in 2024. The Group is focused on
right-sizing average loan sizes to clients in view
of the inflationary environment in many operating
countries, while improving branch productivity as
clients continue to demand our loans, and our staff
remain committed and focused on supporting clients
in difficult operating circumstances.
Financial performance
As a result of the improved operating performance in
H2 2023 compared to H1 2023, the Group realised a
net profit of USD 8.8 million (after the USD 5.4 million
impact of IAS 29) in FY 2023, which demonstrates the
improvement in the operating performance in H2 2023
over the USD 3.7 million achieved in H1 2023. It should
also be noted that hyperinflation accounting was not
applied in the reported figures for H1 2023, as the
impact of IAS 29 is only applied to the consolidated
audited accounts at the year end 2023. I am pleased
that the performance of most of our operating
countries, particularly Pakistan, the Philippines, Ghana,
Kenya, and Tanzania, was excellent in terms of portfolio
quality, growth and profitability.
The Group maintains a diversified risk profile with
operations across thirteen markets in Asia and Africa.
As the impact of global market volatility, inflation and
adverse FX movements varies substantially per country,
the Company benefits from this diversification.
Expected credit losses
The Company reduced its reserves in the balance sheet
for expected credit losses from USD 16.9 million as per
end of 2022 to USD 8.3 million as per end of December
2023, for its OLP, including the off-book BC portfolio
and interest receivables. The decrease primarily relates
to write-off of the outstanding Covid-affected portfolio
(USD 12.9 million in 2023 versus USD 10.8 million in
2022) and improved portfolio quality.
The USD 8.3 million ECL reserves as per
31 December 2023 mainly relate to overdue loans in
India (28%), Myanmar (23%) and Nigeria (23%), with
the remainder spread across the other countries as a
percentage of each country’s OLP or as an aggregate
amount. Further details on the ECL calculation,
including the selected assumptions, are provided in
note 2.5.1 to the consolidated financial statements.
Q: What key areas of the
business are important to
maintain as the company
moves forward?
A: Our primary focus is on expanding
our operations to boost financial
inclusion. We are driving forward
our digital strategy and increasing
our deposit-taking activities.
This is contributing to the growth
and resilience of our business.
Q: Are there any practices
or developments you’ve
introduced this year?
A: We’ve made some organisational
changes to bring fresh perspectives
to our management approach.
We are focused on having the
right people and culture in place
to support the growth and
sustainability of the business.
Q: What achievements make
you proud to be part of ASA
International?
A: Despite the challenges we face, our
team is working tirelessly to deliver
on our purpose to empower women
and reduce poverty.
Q&A with Karin
Digital strategy
The Group’s digital strategy entails the
implementation of our Core Banking System and
our digital financial services platform (‘DFS app’).
Alongside the digitalisation of client procedures,
the Group will seek to make further progress in
enhancing employee processes. On 25 February
2024, we reached a major milestone, by migrating
more than 600,000 clients in Pakistan from our
incumbent loan system to the Temenos Transact
Core Banking System. This migration enables
ASA Pakistan to start taking deposits and grow
their client base in a highly regulated environment.
Also, it sets the stage for the rollout of the new
Core Banking System to our other markets and
provides a foundation for a broader, more
sophisticated product offering in the near future.
The rollout of the Core Banking System combined
with the implementation of the digital app in Ghana
is planned for this year. The Supplier Market Place
app is currently operating in Ghana, with more
than 3,000 customers onboarded and placing
their online orders. The service is expected to be
expanded following the rollout of the digital loan
and banking app.
Competitive environment
The competitive landscape remains unchanged
across the Group. Our strongest competitors are in
India, the Philippines, Nigeria, Tanzania, and Uganda.
In most other markets, we face less competition from
traditional microfinance institutions. Up until now,
we have not been directly affected by competition
from pure digital lenders.
Karin Kersten
Chief Executive Officer,
ASA International Group plc
26 April 2024
See our website for Karin’s full Q&A
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Business model
Our socially
responsible
business model
Branches are deeply rooted
in the community
Microcredit to female micro-entrepreneurs
Average loan disbursement per
client of USD 266 for 6-12 months
Small
businesses
Enhanced
business activity
Income-generating
purpose
Increased
household
spending/saving
Social
empowerment/
well-being
Increased
household income
The ASA Model is a decentralised,
standardised and sustainable microfinance
model that allows for cost efficiency, quick
decision-making and replicability, while
meeting the basic demand for savings and
loans, and over time, digital financial services.
• Target ca. 1,200 clients per branch within a ca. 12km radius.
• Self-sufficient branches closely monitored with on- and off-site
supervision.
• High-touch client interaction through mostly weekly or
fortnightly loan collections and disbursements at the branch.
• Collateral-free, individual loans for income-generating activities
with market-based interest rates.
• 90% of outstanding loan portfolios are primary loans, with the
remaining portion being small business/SME loans.1
• Full repayment before qualifying for new loans and repeat loan
cycles with set limits (20%-50% increase).
• As the number of deposit-taking licenses increases, the levels
of deposits will rise.
• The main sources of funding are from local financial institutions,
development banks and microfinance loan funds.
Read more about socially responsible services and protecting
clients on pages 50 and 51
1 Primary loans is the loan product with the smallest loan size for working capital
purposes of the products we offer in a particular country.
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Business model continued
Stakeholder
Impact in 2023
Impact on our stakeholders
The Company’s strategy and core operations contribute to the
delivery of five UN Sustainable Development Goals (‘SDGs’)
Read more in our Environmental, Social, and Governance (‘ESG’) report on 48
Total loans disbursed (USD)
965.1m
Employee satisfaction
81%
Community project spend (USD)
0.4m
1 Excludes on-the-job training.
Social Performance Indicator
(‘SPI’)
90%
Hours training1
67,107
Branches added
77
Client satisfaction
90%
Number of employees
13,433
Environmental efforts spend
390k
Female clients
96.8%
Clients
• Financial inclusion.
• Empowering women.
• Socioeconomic progress.
• Client Protection Principles.
Communities and
the environment
• Clients trading in the
community.
• Community projects.
• Inflow of capital.
• Minimising environmental
impact.
Countries
• Company taxes paid
to government.
• Higher spending due to
increased income of clients.
Regulators and
industry bodies
• Creating sustainable
lending environment.
• Reliable business partner.
• Supporting policy making.
• Promoting international
standards for regulatory
compliance.
Shareholders and
investors
• USD returns including
projected regular dividends.
• Advancing financial
inclusion.
Colleagues
• Job creation.
• Training and development.
• Positive and stable work
environment.
Taxes (USD)
23.4m
Contribution to economic
development of country
through clients’ increased
income.
Regulators and industry
bodies associated with
92
Through membership at
industry bodies and central
banks, contributing to a
sustainable microfinance
environment.
Public float
53.7%
Read more about our stakeholder engagement on 14
Dividend
Nil
Return on Equity (‘ROE’)
10.5%
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Section 172 statement
Engaging with our stakeholders
The Board continues to uphold the highest standards of conduct by respecting the needs and views of its stakeholders and the environment.
The disclosures set out on this page demonstrate how the Company has considered the matters set out in Section 172(1)(a) to (f) of the Companies Act 2006.
Our stakeholders How we engage How the Board engages and is kept informed What matters most
Clients
• Clients receive loans at branch offices.
• Branch staff meet clients at group meetings.
• Branch staff visit clients’ businesses.
• Senior management conducts client visits.
• Field staff maintain mobile phone contact with clients.
• Regular surveys are conducted.
Read more about protecting our clients on page 51
• Senior management reports to Audit and Risk Committee (‘ARC’).
• Monthly business updates provided.
• Client survey and Committee reports shared.
• Community project progress reported.
• Client loan repayment capacity.
• Loans with tangible economic benefits for clients.
• Channels for feedback and complaints.
• Market-driven interest rates.
• Expanded digital access and relevant product offerings.
• Transparent policies and procedures.
• Flexible moratorium options.
• Face-to-face interaction.
Colleagues
• Senior managers mentor junior staff.
• Senior management sits on operating subsidiaries’
boards.
• Head office-level meetings with senior management.
• Encourage cooperation and leadership development.
• Established Diversity, Equity and Inclusion (‘DEI’)
targets to increase female representation.
Read more about supporting our colleagues on page 52
• Meetings among ARC Chair, CFOs, and Internal Audit staff.
• Senior management reports in Board meetings.
• Staff survey results are reported.
• Grievance Mitigation Committee (‘GMC’) and whistleblowing
reports presented at all meetings.
• Progress on DEI targets reported.
See page 72 for Board activities relating to its fulfilment of duties
under Section 172
• Safe work environment.
• Robust GMC procedures with Board emphasis.
• Fair salary and benefits.
• Employee development through training and promotion.
• Regular feedback channels.
• Commitment to gender diversity.
• Streamlined, digitised internal processes for better
productivity.
Communities
and the environment
• Branches embedded in the communities.
• Field staff work closely with community members.
• Group meetings and client referrals are part of the
communities.
• Investment and engagement in community projects.
• Climate targets established.
Read more about our community projects on page 54
and the environmental responsibility on page 56
• Community project initiatives reported.
• Senior management reports community feedback in Board meetings.
• Budget spending and impact metrics for community projects.
• Progress on climate targets reported.
• Commitment to enhancing clients’ and families’
socioeconomic advancement.
• Community engagement initiatives.
• Providing relief during hardship.
• Environmental impact mitigation and awareness efforts.
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Section 172 statement continued
Our stakeholders How we engage How the Board engages and is kept informed What matters most
Lenders
• Meetings and field trips with local and
international financiers.
• Updates by the CEO following the publication
of important Company news.
• Senior management reporting in Board meetings on funding matters.
• Securing liquidity.
• Securing a stable and reliable funding position.
• Monitoring of covenants.
• Overseeing progress of extending waivers, no-action letters
in case of potential covenant breaches.
• Stay informed about business performance.
• Diversify funding sources.
• Cultivate relationships with new and existing stakeholders.
• Secure favourable terms through negotiations.
Shareholders
and investors
• Business updates.
• Audio webcasts and financial results announcements.
• Investor and analyst meetings.
• A dedicated investor website.
• Investor conferences, roadshows and field trip visits.
• Integrate shareholder and investor feedback in the Group’s strategy.
• CEO delivers updates in Board meetings and regular IR updates
provided.
• Review analyst reports.
• Offer feedback on RNS announcements and the Annual Report.
• Conduct Annual General Meetings.
• Stay informed about business performance, long-term goals,
strategy, and execution.
• Foster constructive dialogue.
• Exchange viewpoints on Group strategy.
• Uphold compliance and transparency for investor confidence.
See Engaging with shareholders on page 78
Regulators and
industry bodies
• Stay updated on reporting regulations.
• Country Heads engage in meetings with
regulatory bodies.
• Foster relationships with local town councils, law
enforcement agencies, government bodies, and
microfinance networks.
• Senior management reports during Board meetings.
• Ensure full compliance with reporting requirements and
local regulations.
• Maintain a sustainable lending environment for clients.
• Discuss proposed new regulations.
• Fully comply with reporting requirements and
local regulations.
• Engage positively with local government and
regulatory initiatives.
• Participate in industry networks at the local level.
• Pursue deposit-taking licences as needed.
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Section 172 statement continued
The Company’s commitment
to creating pathways to progress
was central to decision making
during the year, exemplified through
three pivotal choices: shrinking an
underperforming entity, restructuring
Group governance, and fostering
cultural change. The case studies
demonstrate the Company’s
conscientious approach to decision
making, of which stakeholder
engagement is a fundamental
aspect of the strategic process.
1. Shrinking the business in India
Throughout the year, the Board continuously
evaluated business shrinkage in India, prompted
by the entity’s performance. Acknowledging
that any such decision may impact the
relationships with various stakeholders,
management is exploring alternative strategies
to safeguard the interest of all stakeholders of
the institution. The Board sanctioned provisions
and deliberated upon a comprehensive report
from Group financial management, addressing
India’s underperformance. The report included
suggestions for improvement and an agreement
on setting targets to rectify the situation.
The Board prioritised stakeholders, aiming
to ensure lenders’ continuous repayment and
maintain financial stability, fostering trust with
crucial contributors. Stabilising operations and
job protection measures were strategically
implemented for colleagues, while client concerns
were addressed to minimise disruptions and
uphold critical relationships and commitments
to best-performing clients.
Reducing exposure to the Indian market
post-Covid aligned with a broader risk
management strategy, demonstrating a
commitment to prudently navigating challenges
and safeguarding shareholder value.
2. Enhancing governance
Amidst a dynamic business landscape, the
Company embarked on a strategic journey
to enhance its governance, a process catalysed
by the appointment of a new CEO of the Group
in June. Recognising the need for agility and
effective leadership, the management team
underwent a significant reorganisation, paving
the way for the introduction of a new Executive
Committee. The shift to team-based governance
marked a departure from conventional structures,
reflecting a commitment to adaptability and
collaborative decision-making.
As part of this transformative process, the
Board evaluated the implications on various
stakeholders. For colleagues, the restructuring
aimed to enhance efficiency, responsiveness,
and the overall effectiveness of the leadership
team towards its colleagues.
The introduction of a new governance structure
signified a strategic move aligned with a
shareholder preference for innovation and
adaptability as a response to the evolving
business landscape.
3. Cultural and leadership change
Embarking on a strategic initiative to redefine its
culture, values, and strengthen local teams, the
Company aimed to optimise performance and
prompt reflective leadership changes in line with
the evolving business ethos. The Board ensured
stakeholder alignment, considering the interests of
employees, clients, and shareholders throughout.
Strategic leadership changes, carefully evaluated
by the Board, aimed to align with evolving
business principles, laying the groundwork for
improved talent management with values-driven
practices. The objective: elevate organisational
dynamics, boosting shareholder value through
robust leadership.
For colleagues, a shift towards a values-driven
culture was evident. Increased internal
communications aimed to instil values of
professionalism, teamwork, and integrity, laying
a foundation for future performance-based
talent management practices.
Clients, integral stakeholders, were considered
in emphasising values alignment. By integrating
these values into operations, the Company aims
to deliver superior client experiences, fostering
sustained, value-driven relationships.
Principal decisions
and discussions
Case studies
Stakeholders considered Stakeholders considered Stakeholders considered
• Lenders.
• Colleagues.
• Clients.
• Shareholders.
• Colleagues.
• Shareholders.
• Colleagues.
• Clients.
• Shareholders.
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Our strategy
Increase number
of branches and
borrowers
Offer online loans
Maintain branch model
and proven credit
methodology
Increase loan volumes
Offer payments, savings
and other financial
services
Maintain group meetings
and active field presence
Introduce new loan products
Provide non-financial value
added services (Supplier
Market Place, ‘SMP’) to grow
clients’ businesses
Improve branch and loan
officer efficiency by digitised
internal processes
Grow voluntary savings
Attract
new clients
Introduce a digital
channel via mobile
devices to enrich the
high-touch service
Increase
financial
inclusion
Add digital
channel and
digitise internal
processes
Offer digital
products and
services
Growth strategy
The Group aims to achieve sustainable growth and increased financial
inclusion by growing its loan portfolio, digital advancement and
broadening of its products and services
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Our strategy continued
Our progress
Increase financial inclusion
Offer digital products and services
Add digital channel and
digitise internal processes
2023 progress 2024 priorities
Clients
2.3m
Borrowers per
loan officer
287
Gross OLP/Client
$162
OLP
$369.2m
% voluntary savings
to OLP
3.4%
• Continued operational growth in 2023.
• Outstanding Loan Portfolio (‘OLP’) in constant currency grew by 21% to USD 424 million.
• Number of clients grew slightly to 2.33 million, with 5% growth in H2 2023. The countries with the
highest growth in clients are Kenya, Tanzania and Ghana, which added a combined total of 119k clients.
• Average Gross OLP per client in constant currency increased by 16% resulting in USD 186 Gross OLP
per client.
• Significantly increased Business Correspondence portfolio in India, in line with 2023 priorities, improving
total OLP and Gross OLP in India.
• Voluntary savings to OLP remains stable at 3.4%, as there has not been a new market that has started
to take deposits.
• Rolled out the digital market place for clients and their suppliers, called the Supplier Market Place (‘SMP’),
in Ghana. Read more on page 20.
• Received ‘Commencement of Microfinance Banking Business’ certificate in Pakistan.
• Preparing application for the Microfinance Banking licence in Tanzania and Kenya.
• Completed implementation of Core Banking System (‘CBS’) in Pakistan in Q1 2024 and continue
implementation phase of CBS in Ghana.
• A digital financial services (‘DFS’) platform is being developed and will be launched with the
implementation of the new CBS starting with Ghana.
• Increased borrowers per loan officer by 5%, from 272 to 287.
• Proceed with healthy operational growth
in existing markets.
• Increase Outstanding Loan Portfolio.
• Realise growth in number of clients.
• Enhance Gross OLP per client.
• Start taking deposits from clients in Pakistan.
• Launch DFS app that enables digital loans,
payments and savings.
• Grow Supplier marketplace (‘SMP’) in Ghana.
• Progress with obtaining Microfinance Banking
licences in Tanzania and Kenya.
• Leverage the benefits and additional product
offering of the new Core Banking platform in
Pakistan.
• Work towards the implementation of the CBS
combined with a digital proposition in Ghana.
• Initiate platform roll-out in Tanzania and Kenya.
• Further improve operational efficiency by
increasing borrowers per loan officer.
Strategic pillars & KPIs that track against strategy
See the Environmental, Social, Governance (‘ESG‘) report pages 48 to 67
for more information on the Group’s sustainability approach and
progress.
See all the KPIs on page 24
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Milestone migration
in Pakistan
Following the year’s conclusion, ASA Pakistan
achieved a significant milestone by migrating
over 600,000 clients from our previous loan
management system to an off-the-shelf, market
standard, Core Banking System. This migration sets
the stage for ASA Pakistan to commence deposit
mobilisation from clients and meet regulatory
requirements. Additionally, it establishes a solid
foundation for enhancing operational efficiency
and driving growth. Moreover, it positions ASA
Pakistan to expand its product offerings, paving
the way for a more diverse and sophisticated range
of services in the foreseeable future.
Our strategy continued
Digital advancement
The Group’s digitalisation strategy aims to increase client centricity, ease of use and efficiency for both
clients and staff. This transformation will enable the Group to grow significantly, open new client
channels, offer a broader range of services and simplify customer journeys.
Present Future
1 Currently predominantly security collateral. A deposit-taking licence is a prerequisite for offering (public) savings.
2 CBS prerequisite for offering DFS.
Manual and complex Internal processes Digital and simplified
• In-house developed loan
system (‘AMBS’)
• Branch
• Loans
• Deposits1
• Savings (borrowers)
• Packaged Core Banking System (‘CBS’)2
• Digital Financial Services (‘DFS’) system
• Supplier Market Place (‘SMP’) system
• Branch
• Banking app (‘DFS’)
• SMP app
• Accounts
• Loans
• Deposits
• Savings (borrowers and public)
• Payments
• SMP
Technology
Services
Client channel
I’m proud and grateful for this first major step
in our transformation journey. This is a stepping
stone to migrating all entities to our new
technology system. With this journey we enable
growth, broaden our product scope, adhere
to all regulatory requirements in our regulated
entities and offer a complete digital client journey.”
Rob Keijsers
Chief Digital and Information Officer,
ASA International
Links to
Add digital channel
and digitise internal
processes
For further insights into ASA’s digital
progress and the SMP in Ghana, see
the feature story on page 20.
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Feature story – Our clients
Sabina and Augustina’s perspectives
Sabina, a grocery retailer and client of ASA S&L,
recalls her initial experience with the app: “The app
saves me time. Before, I often had to close the shop
or leave it unattended to rush to the market, risking
losing customers. Now, I can stay and serve my
customers without interruptions.” Augustina shares
a similar sentiment, emphasising how the app has
significantly aided her due to a condition she has,
making it challenging to go to the market.
Professionalism driving us beyond transactions
With a strong emphasis on addressing challenges
and ensuring timely deliveries, ASA Dwaso’s
SMP goes beyond mere transactions to deliver
tangible impact. With a keen eye on improving
affordability, responsiveness, and expanding
product offerings based on client requests, the app
is undergoing continuous enhancements to better
serve retailers. Augustina highlights the value of
professionalism in her experience: “The people
I have dealt with have been very responsive. Anytime
I call, I am being attended to.” Looking forward, ASA
Dwaso prioritises nurturing relationships and refining
service standards. Each interaction is not just about
facilitating transactions but about empowering
retailers to thrive in an ever-evolving marketplace.
In an era where technology is transforming
traditional business models, ASA Dwaso, a
subsidiary of ASA International, is pioneering
an initiative to support local retailers in Ghana.
The Supplier Market Place (‘SMP‘) app, launched
in February 2023, is revolutionising the way
small-scale retailers procure goods, connect with
suppliers, and ultimately serve their communities.
Forging trusted relationships
The launch of ASA Dwaso’s SMP aimed to bridge
the gap between retailers and suppliers. With nearly,
3000 clients onboarded since its inception, ASA
Dwaso is not only offering a platform, it’s fostering
relationships. Users learn about the app through
promoters who attend ASA Savings & Loans (‘ASA
S&L’) client group meetings or via word-of-mouth.
“I found out about the app through the Promoter’s
mother. She visited me some time ago and introduced
the app. Because I know her personally, I trusted
to buy from the app. The promoter ensured my first
order came in time. She is trustworthy to work with,”
shares Augustina, a grocery retailer and app user.
A commitment to service
Face-to-face interactions are paramount for ASA
Dwaso, especially considering many clients’ limited
familiarity with technology.” We go the extra mile”,
emphasises Benjamin, an ASA Dwaso employee.
“We pick up for clients, hustle, and even step in
personally for deliveries. It’s about turning challenges
into opportunities and building strong relationships.”
Users onboarded
± 3,000
Empowering progress through technology:
Connecting supply
and demand in Ghana
The app saves me time.
Before, I often had to close
the shop or leave it unattended
to rush to the market, risking
losing customers. Now, I can
stay and serve my customers
without interruptions.”
Sabina
Grocery Retailer,
Client ASA Dwaso and ASA S&L
Link to values
ProfessionalismTeamwork
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Feature story – Our communities
Progress through partnerships:
Uniting for
environmental
stewardship
In a concerted effort to nurture a more
sustainable ecosystem, ASA’s operating
countries have joined hands with diverse
partners to spearhead transformative tree
planting projects. This collaborative endeavour
not only seeks to enhance environmental
stewardship but also showcases the power
of collective action and shared responsibility.
Read Kenya’s story on the next page.
Tree seedlings planted in Kenya
10,500
Estimated programme participants in Kenya
2,880
Partnerships formed in Kenya
16
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Feature story – Our communities continued
Founding fruitful partnerships in Kenya
The journey began with knocking on doors of
government officials and engaging with environmental
departments. Local Sustainability Manager, David
Munge recounts how discussions with the Ministry
of Forest Services and Nairobi County laid the
groundwork for a project. Nairobi was chosen as
the first project location because of its proximity
to ASA Kenya’s headquarters and the importance
of close involvement.
Conversations revolved around where to plant, which
trees to plant – considering the water requirements
of the tree and the use of the tree – and references
were made to working with particular schools.
Dr. Alice Ruto, Director Forestry and Agricultural
Land Use Management at the Nairobi City County
Government and leader of the Kenya Women
Association of Professionals in Agriculture and
Environment, played a crucial role in sourcing
seedlings, negotiating on behalf of ASA Kenya (‘ASA’),
and fostering unique connections. A collaboration
with a tree nursery development programme within a
prison not only provided many trees for the initiative
but also offered an intriguing exchange of ideas.
The synergy expanded further to clients with tree
nurseries, including a bulk purchase from a client
specialising in avocado trees. The symbiotic
relationship left the client feeling not just satisfied
but proud to contribute to the cause.
Cultivating environmental stewardship
Key partnerships were formed with environmentally
responsible schools and universities, carefully chosen
in alignment with government guidance. The students
and school officials became active participants in the
project, adopting and nurturing tree seedlings.
The choice of fruit trees added an extra layer of
excitement among the students, as the prospect
of watching something grow and eventually sharing
the harvest with their friends ignited a tangible
connection to nature and a sense of ownership
among the younger generation.
The project also went beyond planting trees;
it became an educational endeavour. Before
the planting, all participants – including students,
ASA colleagues, clients and community members –
engaged in discussions about the need for climate
action and environmental stewardship. ASA’s
colleagues experienced how the planting project
not only deepened their connection with the nature
but also fostered bonds with clients, as they worked
hand in hand towards a common goal.
The Government of Kenya as a catalyst for
collaboration
The Government’s support, driven by the President’s
commitment to climate action, played a pivotal role.
The Africa Climate Summit held in Nairobi in 2023
emphasised the urgent need for collective efforts,
followed by setting ambitious tree planting targets
for all counties. This initiative not only garnered
support from local chiefs, who mobilised
communities, but also spurred healthy competition
between counties, accelerating collaboration.
To ensure the trees yield the intended results,
Dr. Alice Ruto established the ‘Rapid Result Initiative’,
which diligently monitors the progress of the trees
– including the trees ASA planted in Nairobi County.
Spreading impact and future endeavours
While ASA seeks to expand its impact to other
counties, including more arid areas, the Company
actively engages in discussions with local
governments. The commitment to invest in
environmental initiatives, originating from the
organisation’s leadership, serves as a driving force.
Partners are drawn to collaborating with ASA due
to their socially responsible model, grounded in
client protection principles, extensive outreach,
and personal endorsements from clients. The shared
goals and tangible impact are crucial in nurturing these
partnerships. “We actively seek partnerships with
stakeholders who share our mission. Our aim isn’t just
to roll out programs for the sake of it; we genuinely
aspire to contribute to change”, Mr Munge explains.
Strengthening the ASA business model
The tree planting project in Kenya epitomises the
strength of partnerships, collective responsibility,
and environmental stewardship. This initiative aligns
with the Company’s core value of teamwork, and
by engaging clients in environmental initiatives,
it contributes to ASA’s mission and strengthens
its business model, by promoting sustainable growth
while making a positive impact on the environment
and society.
Tree planting initiatives spanned across ten
countries, resulting in a total of 29.5k trees planted.
Read more about the tree planting target on page 62
One of the events in Rwanda was captured on video.
Watch it here
We actively seek partnerships
with stakeholders who share
our mission. Our aim isn’t just
to roll out programs for the
sake of it; we genuinely aspire
to contribute to change.”
David Munge
Sustainability Manager,
ASA Kenya
Link to values
ProfessionalismTeamwork
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Feature story – Our colleagues
How do the values play a role in shaping
a positive work environment?
“The values serve as our everyday guide,
empowering my colleagues and me to make the
right decisions. They foster strong collaboration,
enabling us to build a cohesive team and enhance
our job performance through taking appropriate
actions. We have a healthy work environment
characterised by close camaraderie, mutual
respect, and consistent support.”
How do you actively promote and instil these
values in your colleagues?
“I actively promote and instil these values among
my colleagues by embodying them in my daily
actions. Leading by example is key; I believe it’s the
most effective way for others to learn. Additionally,
we provide targeted training on ‘Work Attitude
and Values Formation’, integrating these principles
throughout our entire training programme. Regular
reminders during refresher training and counselling
sessions reinforce the importance of upholding
these values, guiding us through challenges.”
What motivates you to align with the
Company values?
“Because these values resonate with my personal
principles. I strive to uphold what I perceive as
right and just. Raised in a conservative family,
I learned the significance of respecting elders and
their viewpoints. Despite inevitable disagreements
stemming from individual disparities, I prioritise
respect as the cornerstone. I firmly believe that
respect forms the basis of professionalism, integrity,
and teamwork. It’s a fundamental expectation
from our clients.”
How have these values contributed to your
professional growth?
“These values have been pivotal in my professional
journey, shaping who I am today. They’ve earned me
the trust and belief of my colleagues, facilitating my
transition from a Development/Loan Officer in the
field to a role in HR at Head Office. Upholding
these values has garnered the Company’s trust in
my capabilities, leading to continuous support for
my growth. Working closely with the management
team and under the guidance of our President
further fuels my drive to learn and develop.”
Jonette at the Annual Loyalty/Service Awards in
December 2023, where she was the first at Head
Office to receive the ‘Over 15 years’ award.
Living our values, driving progress:
Jonette’s journey
of growth
Link to values
The values serve as our
everyday guide, empowering
my colleagues and me to make
the right decisions. They foster
strong collaboration, enabling
us to build a cohesive team and
enhance our job performance
through taking appropriate
actions.”
Jonette
Deputy Manager HR and Admin,
Pagasa Philippines
Introducing Jonette, a cherished member of Pagasa
Philippines, praised by her direct colleague for
embodying the Company’s core values of
professionalism, integrity, and teamwork. With over
15 years of dedicated service, Jonette, currently
serving as Deputy Manager for HR and Admin,
consistently delivers exemplary performance while
treating all colleagues with respect and fairness.
Jonette brings a unique perspective as an employee
who has developed and is a part of HR, enriching the
team with her insights and experience. Her integrity
permeates every facet of her work, setting a standard
of trust. Within HR and Admin, her collaborative
spirit is evident as she shares knowledge, fills in for
absent colleagues, and serves as a role model. Her
colleagues emulate her, fostering a culture where her
values become intrinsic to the organisation’s ethos.
In a succinct Q&A, Jonette highlights the seamless
alignment between her personal values and those
of the Company, emphasising how these principles
have contributed to her professional growth.
She underscores the vital role of professionalism,
integrity, and teamwork in creating a positive work
environment, where individuals are empowered
to make sound decisions, collaborate effectively,
and excel in their roles.
IntegrityProfessionalismTeamwork
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023
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022
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021
$351.2m
$403.7m
$369.2m
2
023
2
022
2
021
4.3%
3.5%
3.4%
2
023
2
022
2
021
3.4%
1.1%
1.8%
2
023
2
022
2
021
28%
28%
31%
2
023
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022
2
021
17.9m
6.4m
8.8m
2
023
2
022
2
021
$0.18¢
$0.09¢
$0.09¢
2
023
2
022
2
021
67.5%
77.4%
72.1%
2
023
2
022
2
021
$160
$181
$162
2
023
2
022
2
021
2.3m
2.4m
2.3m
2
023
2
022
2
021
272
287
287
2
023
2
022
2
021
92%
91%
90%
2
023
2
022
2
021
5.9%
5.2%
2.1%
Financial Statements Additional InformationGovernance Report
Strategic Report
SPI is a social audit tool made by CERISE as per Universal Standards
managed by SMART Campaign. The assessment is divided into seven
dimensions with both qualitative and quantitative questions. Each
dimension carries a score of 100.
Key Performance Indicators
The Key Performance Indicators (‘KPIs’) represent the activities that the Group sees as important to the achievement of its business objectives.
The financial KPIs represent the assets, the performance of the assets, and the income generated from the assets.
The non-financial KPIs reflect the operational
efficiency and the social impacts of the Group.
Financial Non-financial
Outstanding Loan Portfolio (‘OLP’)
USD 369.2m
Number of clients
2.3m
Gross OLP/Client
USD 162
PAR>30 dpd
2.1%
Return On Assets (‘ROA’)
1.8%
Net profit
USD 8.8m
Earnings Per Share (‘EPS’)
USD 0.09¢
Social Performance Indicators (‘SPI’)
90%
Return on Assets is calculated by dividing the reported net profit
after tax by the average of total assets.
The figure depicts net Outstanding Loan Portfolio including off-book
net Business Correspondence (‘BC’) loan portfolio from IDFC, Jana
Small Finance Bank and Fincare and Direct Assignment (‘DA’) loans
with State Bank of India (‘SBI’).
The number of clients in all operating markets.Gross Outstanding Loan Portfolio including BC and DA loans divided
by total number of clients.
PAR>30 is the percentage of gross on-book OLP that have one or
more instalment repayments of principal past due for more than
30 days, but less than 365 days, divided by total outstanding on-book
gross loan portfolio.
Consolidated net profit for the year as reported in the financial
statements.
Earnings per share is calculated by dividing the net profit after tax
by the weighted average number of the ordinary shares outstanding
during the year. For 2023, number of shares is equivalent to the
number of ASA International Group plc shares, which was 100 million.
Borrowers per loan officer
287
Net Interest Margin (‘NIM’)
31%
Cost to income ratio
72.1%
Voluntary savings to OLP
3.4%
The borrowers per loan officer is calculated by dividing total number
of clients by total number of loan officers.
Net interest margin measures the difference between the interest
income generated and the amount of interest expenses, relative
to the amount of average outstanding net loan portfolio.
Cost to income ratio is calculated by dividing total operating expenses
by total net operating income.
Voluntary savings to OLP is calculated by dividing total voluntary
savings by total outstanding loan portfolio including BC and DA loans.
Find more non-financial performance indicators
in our ESG report on pages 48 to 67
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Improvement led by strong operational and financial performance
of Pakistan, the Philippines, Ghana, Tanzania and Kenya.
Financial review
FY 2023 highlights
• The Company’s financial results improved in H2
2023 with net profit increasing to USD 8.8 million
by year end 2023 from USD 3.7 million in H1 2023.
The Company’s overall FY 2023 financial performance
decreased compared to FY 2022, with net profit
declining by 51%, primarily due to adverse FX
movements, demonetisation in Nigeria, and the
application of hyperinflation accounting to Ghana
and Sierra Leone.
• The impact of the application of hyperinflation
accounting for Ghana and Sierra Leone caused
a decrease in net profit by USD 5.4 million and an
increase in total equity of USD 0.6 million in 2023.
This adjustment was not included in the reported
H1 2023 numbers as the application of IAS 29
Hyperinflation accounting occurred for the first
time in these consolidated accounts for the financial
year ended 31 December 2023.
• Pakistan, the Philippines, Ghana, Tanzania, and
Kenya made significant positive contributions
to the Group’s net profitability, due to increased
loan demand and high loan portfolio quality in
all these markets.
• Group operating results improved in H2 2023 with
OLP growing by 10% to USD 369.2 million from
USD 334.4 million in H1 2023, and portfolio quality
improved to 2.1% as of 31 December 2023 from 3.8%
as of 30 June 2023. The 5% year-on-year OLP growth
in USD (21% in constant currency) was driven by
improved performances in Pakistan, the Philippines,
Ghana, Tanzania, and Kenya.
• High portfolio quality has been maintained as a result of
improvements in the operating environments. PAR>30
for the Group’s operating subsidiaries significantly
improved from 5.9% as at 31 December 2022 to 2.1%
as at 31 December 2023, primarily due to write-offs
of long overdue loans in India and Myanmar, combined
with growth in OLP in US Dollar terms in other major
countries. Pakistan, Ghana, and Kenya had an
outstanding portfolio quality in the period, with
PAR>30 less than 0.5% as at 31 December 2023.
• Reserves for expected credit losses (‘ECL’) on OLP
in the balance sheet, including the off-book BC
portfolio in India and interest receivables, reduced
to USD 8.3 million in FY 2023 from USD 16.9 million
in FY 2022. The decrease primarily relates to write-off
of the outstanding Covid-affected portfolio and
improved portfolio quality.
• The devaluation of our operating currencies
contributed to foreign exchange translation losses
of USD 24.1 million in FY 2023 (FY 2022: USD 34.0
million) and a decrease of the Company’s total equity
from USD 89.7 million as at 31 December 2022 to
USD 76.6 million as at 31 December 2023.
• The Group did not recognise deferred tax assets
amounting to USD 5.6 million which related to
past losses for mainly India, as it failed to meet the
future profitability threshold required under IFRS.
Additionally, prior year tax adjustments of USD 3.0
million primarily in Pakistan, India, Tanzania, and
Nigeria were taken in 2023. These resulted in a
substantial increase in our tax expenses and a high
effective tax rate for FY 2023.
Continued improvement of operational
and financial performance in H2 2023
FY 2023 performance
Amounts in USD millions) FY 2023 H1 2023 FY 2022
% Change
FY 2022-
FY 2023
% Change
FY 2022-
FY 2023
(constant
currency)
% Change
H1 2023-
FY 2023
Number of clients (m) 2.3 2.2 2.3 1% 5%
Number of branches 2,016 2,073 2,028 -1% -3%
Profit before tax1 32.2 13.8 46.3 -30% -16% 33%
Net profit1 8.8 3.7 17.9 -51% -31% 38%
OLP2 369.2 334.4 351.2 5% 21% 10%
Gross OLP2 377.2 346.8 367.5 3% 18% 9%
PAR>30 days3 2.1% 3.8% 5.9%
1 Profit before tax and net profit for FY 2023 include an IAS 29 hyperinflation adjustments loss of USD 5.4 million, and profit before tax and
net profit for H1 2023 exclude hyperinflation adjustments, as hyperinflation accounting was applied for the first time in the 2023
consolidated financial statements.
2 Outstanding loan portfolio (‘OLP’) includes off-book Business Correspondence (‘BC’) loans and Direct Assignment loans, and loans valued
at fair value through profit and loss (‘FVTPL’), excludes interest receivable, unamortised loan processing fees, and deducts ECL reserves from
Gross OLP.
3 PAR>30 is the percentage of on-book OLP that has one or more instalment of repayment of principal past due for more than 30 days and less
than 365 days, divided by the Gross OLP.
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Financial review continued
Group financial performance
(Amounts in USD’000) FY 2023 H1 2023 FY 2022
% Change
FY 2022-
FY 2023
% Change
FY 2022-
FY 2023
(constant
currency)
% Change
H1 2023-
FY 2023
Profit before tax1 32,195 13,815 46,281 -30% -16% 33%
Net profit1 8,757 3,676 17,887 -51% -31% 38%
Cost/income ratio 72% 77% 68%
Return on average assets (TTM)2 1.8% 1.5% 3.4%
Return on average equity (TTM)2 10.5% 8.7% 18.5%
Earnings growth (TTM)2 -51% -72% 181%
OLP 369,215 334,400 351,151 5% 21% 10%
Gross OLP 377,219 346,804 367,535 3% 18% 9%
Total assets 490,027 452,332 489,752 0.1% 8%
Client deposits3 79,073 72,718 84,111 -6% 9%
Interest-bearing debt3 268,464 245,314 257,466 4% 9%
Share capital and reserves 76,611 69,249 89,661 -15% 11%
Number of clients 2,330,498 2,224,542 2,299,558 1% 5%
Number of branches 2,016 2,073 2,028 -1% -3%
Average Gross OLP
per Client (USD) 162 156 160 1% 16% 4%
PAR>30 days 2.1% 3.8% 5.9%
Client deposits
as % of loan portfolio 21% 22% 24%
Debt-to-equity ratio 3.5 3.5 2.9
1 Profit before tax and net profit for FY 2023 include an IAS 29 hyperinflation adjustments loss of USD 5.4 million, and profit before tax
and net profit for H1 2023 excludes hyperinflation adjustments, as hyperinflation accounting was applied for the first time in the 2023
consolidated financial statements.
2 TTM refers to the previous 12 months.
3 Excludes interest payable.
• The unrestricted cash and cash equivalents
remained at a healthy level of USD 48 million
as of 31 December 2023 (31 December 2022:
USD 55 million). The Company maintains
a significant funding pipeline.
Outlook
The outlook for 2024 remains positive with improved
business performance expected for our operations
compared to 2023 on the back of better performance
in H2 2023. However, inflation and related foreign
exchange (‘FX’) movements are expected to continue
to impact the Group’s operating subsidiaries’
performances. The reported net income for the Group
will also depend on which countries will be classified
as hyperinflationary at the end 2024. Based on current
preliminary inflation projections, it is expected that
the accounting for hyperinflation will be applicable for
Ghana and Sierra Leone in 2024. Pakistan and Nigeria
are currently on the watchlist.
Chief Executive Officer’s comment
Demand has picked up as our clients and staff
continued to demonstrate their resilience while
operating in economic circumstances that have
remained challenging. This activity and resilience
led to an improved performance in our major operating
countries, Pakistan, the Philippines, Ghana, Kenya,
and Tanzania, almost all of which recorded excellent
portfolio quality, growth, and profitability. As previously
announced, against the backdrop of global market
volatility, the improved performance in our major
operating markets was offset by FX movements in
these markets which has significantly impacted the
Group OLP and profitability in USD terms.
We are excited to observe the roll-out of the new Core
Banking System in Pakistan and Ghana in 2024, in line
with the implementation of our digital strategy.
Whilst the impact of inflation including hyperinflation
accounting and the related FX movements are
expected to continue to dampen the Group’s
financial performance in USD terms in 2024, given
improved operating developments in H2 2023, we
are confident of being able to deliver improved
performance of our operations in 2024.
Karin Kersten,
Chief Executive Officer,
ASA International
We are pleased that the Group
has returned to seeing growth
in its operations and increased
profitability in H2 2023, with
the operating environment
and profits improving across
most of the Group’s operating
markets when compared to the
first half of the year.”
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Financial review continued
South Asia
(Amounts in USD’000) FY 2023 H1 2023 FY 2022
% Change
FY 2022-
FY 2023
% Change
FY 2022-
FY 2023
(constant
currency)
% Change
H1 2023-
FY 2023
Profit before tax 10,021 3,766 12,395 -19% 11% 66%
Net profit 3,298 487 3,103 6% 77% 478%
Cost/income ratio 68% 72% 64%
Return on average assets (TTM) 2.8% 0.7% 1.9%
Return on average equity (TTM) 11.3% 3.4% 8.8%
Earnings growth (TTM) 6% -90% 125%
OLP 117,460 112,089 118,590 -1.0% 13% 4.8%
Gross OLP 119,730 119,869 128,460 -7% 6% -0.1%
Total assets 102,803 106,979 133,894 -23% -4%
Client deposits 1,663 1,718 1,345 24% -3%
Interest-bearing debt 53,569 65,357 85,878 -38% -18%
Share capital and reserves 24,995 20,526 33,393 -25% 22%
Number of clients 842,001 860,407 935,091 -10% -2%
Number of branches 589 661 670 -12% -11%
Average Gross OLP per Client (USD) 142 139 137 4% 17% 2%
PAR>30 days 1.8% 7.3% 11.1%
Client deposits as % of loan portfolio 1% 2% 1%
Debt-to-equity ratio 2.1 3.2 2.6
South Asia’s financial and operational results improved in
H2 2023 compared to H1 2023, with net profit increasing
to USD 3.3 million by year end 2023 from USD 0.5 million
in H1 2023, OLP increasing to USD 117.5 million from
USD 112.1 million, and PAR>30 improving to 1.8% from
7.3%, despite the number of branches decreasing by 72
to 589 and the number of clients decreasing by 18k to 842k.
Outstanding Loan Portfolio (USD)
$117. 5m
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ASA Pakistan grew its operations over
the past 12 months.
ASA India intentionally shrank its
operations over the past 12 months, as
it focused on recovery of overdue loans
while growing the off-book portfolio.
Lak Jaya stabilised its operations over
the past 12 months.
• Number of clients increased from
606k to 616k (up 2% YoY).
• Number of branches remained at 345.
• OLP increased from PKR 17.9bn
(USD 79.1m) to PKR 19.4bn
(USD 69.5m) (up 9% YoY in PKR).
• Gross OLP/Client increased from
PKR 29.8k (USD 131) to PKR 31.6k
(USD 113) (up 6% YoY in PKR).
• PAR>30 improved from 0.7% to 0.3%.
• Number of clients reduced from 284k
to 183k (down 36% YoY).
• Number of branches reduced from 261
to 180 (down 31% YoY).
• On-book portfolio decreased from
INR 1.2bn (USD 14.2m) to INR 0.43bn
(USD 5.2m) (down 63% YoY in INR).
• Off-book portfolio increased from
INR 1.8bn (USD 21.5m) to INR 3.2bn
(USD 38.3m) (up 79% in INR).
• Gross OLP/Client increased from
INR 13.1k (USD 158) to INR 20.8k
(USD 251) (up 60% YoY in INR).
• PAR>30 improved from 49.0% to
16.4%, and PAR>30 amount decreased
from INR 903.4m (USD 10.9m) to
INR 83.4m (USD 1.0m).
• ASA India’s collection efficiency
improved to 97% in December 2023.
As of 31 December 2023, ASA India
had collected USD 7.3 million from
a total of USD 30.5 million in loans
written-off since 2021.
• Number of clients decreased from 45k
to 43k (down 4% YoY).
• Number of branches remained at 64.
• OLP increased from LKR 1.39bn
(USD 3.8m) to LKR 1.43bn (USD 4.4m)
(up 2% YoY in LKR).
• Gross OLP/Client reduced from
LKR 32.4k (USD 89) to LKR 31.5k
(USD 97) (down 3% YoY in LKR).
• PAR>30 improved from 8.5% to 5.0%.
IndiaPakistan Sri Lanka
 Regional head offices
1 See note 13.2 to the consolidated financial
statements for details on the off-book portfolio.
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South East Asia
(Amounts in USD’000) FY 2023 H1 2023 FY 2022
% Change
FY 2022-
FY 2023
% Change
FY 2022-
FY 2023
(constant
currency)
% Change
H1 2023-
FY 2023
Profit before tax 4,627 2,342 4,217 10% 10% -2%
Net profit 3,376 1,694 1,910 77% 77% -1%
Cost/income ratio 84% 83% 82%
Return on average assets (TTM) 3.0% 3.1% 1.8%
Return on average equity (TTM) 23.0% 22.5% 12.0%
Earnings growth (TTM) 77% 891% 663%
OLP 73,979 68,073 63,316 17% 16% 9%
Gross OLP 76,988 70,067 66,955 15% 14% 10%
Total assets 119,510 111,703 102,917 16% 7%
Client deposits 26,146 23,871 22,069 18% 10%
Interest-bearing debt 69,804 66,178 58,416 19% 5%
Share capital and reserves 14,341 14,666 14,980 -4% -2%
Number of clients 444,210 429,533 424,076 5% 3%
Number of branches 458 463 441 4% -1%
Average Gross OLP per Client (USD) 173 163 158 10% 9% 6%
PAR>30 days 2.8% 1.7% 6.5%
Client deposits as % of loan portfolio 35% 35% 35%
Debt-to-equity ratio 4.9 4.5 3.9
Outstanding Loan Portfolio (USD)
$74.0m
South East Asia’s net profit increased to USD 3.4 million
by year end 2023 from USD 1.7 million in H1 2023.
The region’s OLP increased in H2 2023 compared
to H1 2023 by 9% from USD 68.1 million to
USD 74.0 million, despite the number of branches
decreasing by 1% from 463 to 458 and PAR>30
increasing from 1.7% to 2.8%.
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Pagasa Philippines’ operations grew
over the last 12 months.
ASA Myanmar saw an increase
in number of clients and OLP over
the last 12 months.
• Number of clients increased
from 325k to 333k (up 2% YoY).
• Number of branches increased
from 345 to 370 (up 7% YoY).
• OLP increased from PHP 2.8bn
(USD 49.6m) to PHP 3.0bn
(USD 54.2m) (up 9% YoY in PHP).
• Gross OLP/Client increased from
PHP 8.6k (USD 153) to PHP 9.2k
(USD 166) (up 8% YoY in PHP).
• PAR>30 increased from 1.7% to 3.8%.
• Number of clients increased from 99k
to 111k (up 12% YoY).
• Number of branches decreased
from 96 to 88 (down 8% YoY), as the
Group decided to cease operations
in these branches which were located
in conflict zones.
• OLP increased from MMK 28.9bn
(USD 13.8m) to MMK 41.6bn
(USD 19.8m) (up 44% YoY in MMK).
• Gross OLP/Client increased
from MMK 361.8k (USD 172) to
MMK 409.5k (USD 195) (up 13%
YoY in MMK).
• PAR>30 improved significantly
from 20.4% to 0.2%.
The Philippines Myanmar
 Regional head offices
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Outstanding Loan Portfolio (USD)
$72.3m
West Africa
West Africa’s financial result decreased in H2 2023, compared to H1 2023,
due to the application of hyperinflation accounting on the full year results,
with net profit amounting to USD 7.5 million for the full year 2023
compared to USD 4.2 million in H1 2023. When including the impact of
hyperinflation accounting in H1 2023, the results for H2 2023 would show
a significant increase. The region’s operational result in H2 2023 improved
with OLP increasing 20% from USD 60.3 million to USD 72.3 million
and PAR>30 improving from 5.2% to 3.3%.
(Amounts USD’000) FY 2023 H1 2023 FY 2022
% Change
FY 2022-
FY 2023
% Change
FY 2022-
FY 2023
(constant
currency)
% Change
H1 2023-
FY 2023
Profit before tax1 14,632 6,952 27,799 -47% -38% 10%
Net profit1 7,514 4,220 19,215 -61% -55% -22%
Cost/income ratio 48% 57% 43%
Return on average assets (TTM) 7.6% 8.2% 15.8%
Return on average equity (TTM) 15.6% 16.0% 33.2%
Earnings growth (TTM) -61% -60% -23%
OLP 72,260 60,349 82,380 -12% 19% 20%
Gross OLP 74,501 62,914 84,853 -12% 20% 18%
Total assets 89,494 85,774 108,395 -17% 4%
Client deposits 35,642 30,798 39,544 -10% 16%
Interest-bearing debt 3,752 4,028 4,326 -13% -7%
Share capital and reserves 41,912 42,551 54,591 -23% -2%
Number of clients 425,058 379,467 433,897 -2% 12%
Number of branches 452 452 446 1% 0%
Average Gross OLP per Client (USD) 175 166 196 -10% 23% 6%
PAR>30 days 3.3% 5.2% 4.2%
Client deposits as % of loan portfolio 49% 51% 48%
Debt-to-equity ratio 0.1 0.1 0.1
1 Profit before tax and net profit for FY 2023 include an IAS 29 hyperinflation adjustments loss of USD 5.4 million, and profit before tax and net profit for H1 2023
excludes hyperinflation adjustments, as hyperinflation accounting was applied for the first time in the 2023 consolidated financial statements.
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ASA Savings & Loans operations
continued to improve with excellent
portfolio quality.
ASA Nigeria saw a deterioration in
financial and operational performance.
ASA Sierra Leone saw an improvement
in operational performance.
• Number of clients increased from
177k to 201k (up 14% YoY).
• Number of branches increased
from 137 to 143 (up 4% YoY).
• OLP increased from GHS 416.3m
(USD 40.8m) to GHS 620.9m
(USD 51.9m) (up 49% YoY in GHS).
• Gross OLP/Client increased from
GHS 2.4k (USD 231) to GHS 3.1k
(USD 259) (up 31% YoY in GHS).
• PAR>30 improved from 0.6% to 0.1%.
• Number of clients reduced from 220k
to 184k (down 16% YoY).
• Number of branches maintained
at 263.
• OLP reduced from NGN 16.7bn
(USD 37.3m) to NGN 14.2bn
(USD 15.8m) (down 15% YoY in NGN).
• Gross OLP/Client increased from
NGN 80.2k (USD 179) to NGN 85.7k
(USD 96) (up 7% YoY in NGN).
• PAR>30 increased from 7.1% to 12.1%.
• Number of clients increased from 37k
to 39k (up 7% YoY).
• Number of branches remained at 46.
• OLP increased from SLE 80.7m
(USD 4.3m) to SLE 104.3m (USD 4.6m)
(up 29% YoY in SLE).
• Gross OLP/Client increased from
SLE 2.3m (USD 123) to SLE 2.8m
(USD 122) (up 21% YoY in SLE).
• PAR>30 improved from 10.7% to 4.6%.
Ghana Nigeria Sierra Leone
 Regional head offices
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Outstanding Loan Portfolio (USD)
$105.5m
East Africa
(Amounts USD’000) FY 2023 H1 2023 FY 2022
% Change
FY 2022-
FY 2023
% Change
FY 2022-
FY 2023
(constant
currency)
% Change
H1 2023-
FY 2023
Profit before tax 11,859 5,993 11,241 5% 12% -2%
Net profit 6,781 3,717 6,913 -2% 3% -18%
Cost/income ratio 69% 69% 68%
Return on average assets (TTM) 5.3% 6.8% 7.0%
Return on average equity (TTM) 24.7% 30.4% 29.8%
Earnings growth (TTM) -2% 14% 49%
OLP 105,516 93,889 86,865 21% 36% 12%
Gross OLP 106,000 93,955 87,267 21% 36% 13%
Total assets 139,762 116,542 113,791 23% 20%
Client deposits 15,622 16,332 21,153 -26% -4%
Interest-bearing debt 86,014 62,115 59,871 44% 38%
Share capital and reserves 28,360 26,878 26,445 7% 6%
Number of clients 619,229 555,135 506,494 22% 12%
Number of branches 517 497 471 10% 4%
Average Gross OLP per Client (USD) 171 169 172 -1% 11% 1%
PAR>30 days 1.1% 1.1% 0.9%
Client deposits as % of loan portfolio 15% 17% 24%
Debt-to-equity ratio 3.0 2.3 2.3
East Africa’s operational result improved in H2 2023
compared to H1 2023 with OLP increasing 12% from
USD 93.9 million to USD 105.5 million, and the number of
branches increasing by 20 to 517. Client deposits decreased
26% in FY 2023 due to operations in Kenya having to fully
refund security deposits of clients as a requirement for
its new operating licence. The region’s financial result
in H2 2023 was lower than in H1 2023 with net profit
decreasing by 18%.
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ASA Tanzania expanded its operations
over the last 12 months.
ASA Kenya expanded its operations
over the 12-month period.
ASA Uganda saw an improvement
in operations over the last 12 months.
ASA Rwanda saw a modest improvement
in operations over the last 12 months.
ASA Zambia expanded its operations
and improved its portfolio quality.
• Number of clients increased from 217k
to 248k (up 14% YoY).
• Number of branches increased
from 180 to 202 (up 12% YoY).
• OLP increased from TZS 119.5bn
(USD 51.2m) to TZS 162.5bn
(USD 64.7m) (up 36% YoY in TZS).
• Gross OLP/Client increased from
TZS 553.1k (USD 237) to TZS 660.4k
(USD 263) (up 19% YoY in TZS).
• PAR>30 increased from 0.4% to 0.9%.
• Number of clients increased from 141k
to 205k (up 45% YoY).
• Number of branches increased
from 124 to 132 (up 6% YoY).
• OLP increased from KES 2.1bn
(USD 16.9m) to KES 3.3bn
(USD 20.9m) (up 57% YoY in KES).
• Gross OLP/Client increased from
KES 14.9K (USD 120) to KES 15.9k
(USD 101) (up 7% YoY in KES).
• PAR>30 improved from 0.8% to 0.3%.
• Number of clients increased from
107k to 121k (up 13% YoY).
• Number of branches increased
from 110 to 120 (up 9% YoY).
• OLP increased from UGX 43.0bn
(USD 11.6m) to UGX 49.3bn
(USD 13.0m) (up 15% YoY in UGX).
• Gross OLP/Client increased from
UGX 404.9k (USD 109) to UGX 405.5k
(USD 107) (up 0.1% YoY in UGX).
• PAR>30 slightly improved from 0.9%
to 0.8%.
• Number of clients reduced from 21.2k
to 20.8k (down 2% YoY).
• Number of branches increased
from 30 to 32 (up 7% YoY).
• OLP increased from RWF 4.6bn
(USD 4.3m) to RWF 5.1bn (USD 4.0m)
(up 11% YoY in RWF).
• Gross OLP/Client increased
from RWF 220.5k (USD 207) to
RWF 253.0k (USD 201) (up 15%
YoY in RWF).
• PAR>30 increased from 4.6% to 6.8%.
• Number of clients increased from 21k
to 25k (up 19% YoY).
• Number of branches increased
from 27 to 31 (up 15% YoY).
• OLP increased from ZMW 51.7m
(USD 2.9m) to ZMW 73.8m
(USD 2.9m) (up 43% YoY in ZMW).
• Gross OLP/Client increased from
ZMW 2.5k (USD 139) to ZMW 3.1k
(USD 119) (up 22% YoY in ZMW).
• PAR>30 improved from 5.0% to 2.6%.
Tanzania Kenya Uganda Rwanda Zambia
 Regional head offices
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Regulatory environment
The Company operates in a wide range of
jurisdictions, each with their own regulatory
regimes applicable to microfinance institutions.
Visit our website for more information on
the regulatory environments for each of the
operating countries
Key events
Pakistan
• ASA Pakistan was granted approval for
‘Commencement of Microfinance Banking
Business’ on 13 November 2023. The mobilisation
of deposits was dependent upon the successful
implementation of its Core Banking System (which
migration to Temenos Transact Core Banking
System was completed on 25 February 2024).
• The State Bank of Pakistan approved an interim
dividend of approximate USD 900k on 2022
results, which was fully paid in February 2024.
The approval of a second interim dividend
declared on FY 2022 results remains pending.
Ghana
• In Q1 2023, the Bank of Ghana approved the
Company’s application for implementing Digital
Financial Services.
• The dividend declared on 2022 results was
approved by the Bank of Ghana in September
2023, and it was fully paid.
Nigeria
• In 2022 and 2023, the Central Bank delayed the
approval of payment of dividends declared in the
past. The dividend declared on 2021 results was
approved in March 2023, and it was fully paid.
The dividend declared on 2022 results was
approved in March 2024.
Kenya
• ASA Kenya submitted a pro forma application
for a Digital Credit Providers licence (‘DCP
licence’) in October 2023 to ensure it was
compliant with the law.
Nevertheless, the Group will always remain exposed to currency movements in both (i) the profit and loss
statement, which will be affected by the translation of profits in local currencies into USD, and (ii) the balance
sheet, due to the erosion of capital of each of its operating subsidiaries in local currency when translated
in USD, where the US Dollar strengthens against the currency of any of its operating subsidiaries.
Funding
The funding profile of the Group has not materially changed during H2 2023:
(Amounts in USD millions) 31 Dec 23 30 Jun 23 31 Dec 22
Local deposits 79.1 72.7 84.1
Loans from financial institutions 214.7 204.9 216.6
Microfinance loan funds 28.2 22.9 21.5
Loans from dev. banks and foundations 25.6 17.5 19.4
Equity 76.6 69.2 89.7
Total funding 424.2 387.2 431.3
The Group maintains a favourable maturity profile with the average tenor of all funding from third parties
being substantially longer than the average tenor at issuance of loans to customers which ranges from six
to twelve months for the majority of the loans.
The unrestricted cash and cash equivalents remained at a healthy level of USD 48 million as of 31 December
2023 (30 June 2023: USD 45 million and 31 December 2022: USD 55 million). The Group managed to raise
USD 179 million in new debt funding in 2023, where USD 104 million was raised in H2 2023 and USD 75
million was raised in H1 2023. Funding costs across the Group stabilised in 2023 compared to 2022 as
benchmark rate increases in some markets were tempered by improved pricing on funding from local sources.
Also, the Group has a strong funding pipeline of USD 171 million for fresh loans, with over 93% having agreed
terms and can be accessed in the short to medium term as of 31 March 2024.
Net debt at the Holding level reduced to USD 61 million as at 31 December 2023 from USD 70 million as at
31 December 2022. The Group maintains the strategy of reducing the proportion of debt funding sourced
at the Holding level over time. This will be achieved by (i) our operating subsidiaries increasing more funding
from local and international lenders, and (ii) increasing remittances from our subsidiaries to the Holdings which
have recently improved, as well as accelerating our deposit taking capabilities over time.
As per 1 April 2024, the Holdings acquired the outstanding principal debt and interest receivable totalling
USD 4.4 million held by ASA Myanmar from various international debt funds managed by Symbiotics and Frankfurt
School Financial Services.
The Group and its subsidiaries have existing credit relationships with more than 60 lenders throughout the world,
which has provided reliable access to competitively priced funding for the growth of its loan portfolio.
Over the past three years and during 2023, a number of loan covenants were breached across the Group, particularly
related to the portfolio quality in India. As of 31 December 2023, the balance for credit lines with breached covenants
amounts to USD 23 million and subsequently waivers have been received for all these breaches.
• Ultimately, the Company would like to obtain a
deposit-taking licence as a microfinance bank
instead of a DCP licence that does not allow for
deposits. The Company was in discussions with
the Central Bank of Kenya regarding the
application for such a microfinance bank licence.
Tanzania
• The Company was also in discussions with the
Bank of Tanzania regarding the application of a
microfinance bank licence.
Regulatory capital
Many of the Group’s operating subsidiaries are
regulated and subject to minimum regulatory capital
requirements. As of 31 December 2023, the Group
and its subsidiaries were in full compliance with
minimum regulatory capital requirements.
Asset/liability and risk management
ASA International has strict policies and procedures
for the management of its assets and liabilities as
well as various non-operational risks. In 2022, the
Group established an Asset-Liability Committee
(‘ALCO’), and the Terms of Reference of the ALCO
were approved by the Board. The ALCO will
continuously manage the Group’s assets and
liabilities to ensure that:
• The average tenor of loans to customers is
substantially shorter than the average tenor
of debt provided by third-party banks and other
third-party lenders to the Group and any of
its subsidiaries.
• Foreign exchange losses are minimised by
having all loans to any of the Group’s operating
subsidiaries denominated or duly hedged in the
local operating currency. All loans from the Group
to any of its subsidiaries denominated in local
currency are also hedged in US Dollars.
• Foreign translation losses affecting the Group’s
balance sheet are minimised by preventing
over-capitalisation of any of the Group’s
subsidiaries by distributing dividends and/or
hedging capital.
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Our operating performance in H2 2023 proved
remarkably more resilient than H1 2023 in the
challenging market conditions. Despite the
ongoing economic crisis, inflation, and the
currency devaluation, we continued to grow
our business in 2023 with sustained profitability.
Hyperinflation accounting was applied for the
first time, resulting in non-cash adjustments
in the Company’s financial information and
reducing net profit but not equity for the year.
Hyperinflation may affect more of our jurisdictions
in the coming year but we aim to continue
to grow.”
Tanwir Rahman,
Chief Financial Officer,
ASA International
The Group has also received temporary waivers,
no-action and/or comfort letters from some of its
major lenders for expected portfolio quality covenant
breaches (primarily PAR>30) caused primarily by the
overdue loans in India. However, these waivers are
not for the full going concern assessment period up
to May 2025. The impact of these potential covenant
breaches was further assessed in the evaluation of
the Group’s going concern as disclosed in note 2.1.1
to the consolidated financial statements. However,
the current economic and market conditions make
it difficult to assess the likelihood of further debt
covenant breaches and whether the waivers
necessary to avoid the immediate repayment of debt
or further extension of loan terms will be forthcoming.
As a result, senior management and the Directors have
concluded that this represents a material uncertainty
that may cast significant doubt over the Group’s ability
to continue as a going concern. Nevertheless, given
the historical and continuing support received from
lenders evidenced by the last four years where the
Group has been continuously able to raise new funds
and receive waivers for such covenant breaches,
and based on continued improved operating
performance in most markets, the Group has a
reasonable expectation that it will have adequate
resources to continue in operational existence
throughout the going concern assessment period.
Impact of foreign exchange rates
As a US Dollar reporting company with operations
in thirteen different currencies, currency movements
can have a major effect on the Group’s USD financial
performance and reporting. The effect of this is
that generally (i) existing and future local currency
earnings translate into fewer US Dollar earnings,
and (ii) local currency capital of any of the operating
subsidiaries will translate into a lower US Dollar capital.
During FY 2023, the local currencies PKR (-24%), NGN
(-100%), KES (-27%), and ZMW (-43%) particularly
depreciated against the USD. This had an additional
negative impact on the USD earnings contribution of
these subsidiaries to the Group and also contributed to
an increase in foreign exchange translation losses.
Countries 31 Dec 23 30 Jun 23 31 Dec 22
Δ 31 Dec 2022-
31 Dec 2023
Δ 31 Dec 2023-
30 Jun 2023
Pakistan (PKR) 279.7 287.1 226.4 (24%) 3%
India (INR) 83.2 82.1 82.7 (1%) (1%)
Sri Lanka (LKR) 323.9 308.2 366.3 12% (5%)
The Philippines (PHP) 55.4 55.3 55.7 1% (0%)
Myanmar (MMK) 2,101.2 2,102.2 2,100.0 (0.1%) 0%
Ghana (GHS) 12.0 11.4 10.2 (17%) (5%)
Nigeria (NGN) 896.6 761.1 448.1 (100%) (18%)
Sierra Leone (SLE) 22.9 18.9 18.9 (21%) (21%)
Tanzania (TZS) 2,512.4 2,416.1 2,332.5 (8%) (4%)
Kenya (KES) 157.0 140.4 123.5 (27%) (12%)
Uganda (UGX) 3,780.2 3,673.8 3,717.6 (2%) (3%)
Rwanda (RWF) 1,259.5 1,172.0 1,067.0 (18%) (7%)
Zambia (ZMW) 25.8 17.6 18.1 (43%) (47%)
The total contribution to the foreign exchange translation loss reserve during 2023 amounted to USD 24.1 million
of which USD 7.7 million related to the depreciation of the PKR, USD 15.1 million related to the depreciation of the
NGN, USD 1.5 million related to the depreciation of the KES, and USD 0.7 million related to the depreciation of the
ZMW. The local currency GHS (-17%) depreciated against the USD, however, this did not contribute to an increase
in foreign exchange translation losses due to the application of hyperinflation accounting to Ghana.
The local currencies PKR, GHS, NGN and KES depreciated against the USD at a slower pace in H2 2023
compared to H1 2023, and the local currencies ZMW started to depreciate against the USD in H2 2023.
Accounting for hyperinflation
The IFRS standard IAS 29 “Financial Reporting in Hyperinflationary Economies” (‘IAS 29’) requires the Group
to adjust the 2023 financial information of operating entities, which have a three-year cumulative inflation
exceeding 100% in the period 2021-2023, so that all items are presented to reflect the current purchasing
power at the reporting date. In 2023, the three-year cumulative inflation in Ghana and Sierra Leone exceeded
100%. Based on this, hyperinflation accounting is applied for the first time in the consolidated financial
statements of the Group. The application of IAS 29 results in non-cash adjustments in the presentation of
the financial information of the Group. Net profit decreased by USD 5.4 million, however, total comprehensive
income remained similar and total equity increased by USD 0.6 million after the IAS 29 adjustments. Further
details are provided in note 2.5.8 to the consolidated financial statements.
Based on current preliminary inflation projections, it is expected that the accounting for hyperinflation will
be applicable for Ghana and Sierra Leone in 2024. Pakistan and Nigeria are currently on the watchlist.
High effective tax rate
The Group did not recognise deferred tax assets amounting to USD 5.6 million, which related to past losses for
mainly India, as it failed to meet the future profitability threshold required under IFRS. The Group will be able
to recognise these deferred tax assets provided these entities turn profitable again. Additionally, prior year tax
adjustments of USD 3.0 million primarily in Pakistan (due to retroactive application of super tax), India, Tanzania,
and Nigeria were taken in 2023. These resulted in a substantial increase in our tax expenses and effective tax rate
for the year. Further details are provided in note 11 to the consolidated financial statements.
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Risk management
Risk management framework
1 Ensuring the resources are in place to effectively implement the risk control framework and that staff are equipped with necessary expertise.
1. Defines high-level strategy. Ensures the Group has effective risk management
policies in place. Approval of the risk management framework and risk principles.
2. Sets risk appetite and strategy, frameworks and principles
to be recommended to the Board. Identifies new and
emerging risks.
3. Senior management
determines risk appetite.
4. Management defines governance, risk and compliance
framework including principal processes and procedures.
5. Three lines of defence model
implemented at all levels of the Group.
6. Frequent reporting at the country level as well
as from country to Group level to identify key risk
areas and prioritise risks likely to occur.
7. Development of risk culture
throughout the organisation.
8. Day-to-day management of risks
as per three lines of defence model.
Governance framework
Three lines of defence
Risk and control cycle
from identification to reporting
Primary risk categories
Risk culture
Risk resources
and capabilities
1
Senior
management role
Risk appetite
Risk management framework
In the face of ever-changing challenges and
risks, the Group continuously builds on its risk
management culture to ensure the risk management
is comprehensive and meets the requirements of a
sustainable financial institution. As a microfinance
operator, the Group takes a prudent and consistent
approach towards risk and the Group’s risk culture
is based on its values, beliefs, knowledge, attitudes
and understanding of risk across its various
countries. The Group assesses its risk culture
by identifying and evaluating its quantifiable and
non-quantifiable risks that are then integrated
in management and decision-making processes.
Identification and assessment
At the subsidiary level there is a risk officer
responsible for preparing risk reports on a quarterly
basis by assessing the risks facing the Company
in terms of likelihood and impact. Emerging risks
are continuously monitored and reported as soon
as identified. The risk officer also captures what
mitigation activities are being taken to manage the
risks. However, the mitigation responsibility lies with
the process owner. The risk reports are evaluated by
the subsidiary-level Risk Management Coordination
Committee and approved by the subsidiary CEO
before presenting to the subsidiary Audit and Risk
Committee (‘ARC‘). The Group risk management
team collects these country risk reports and prepares
the Group risk report based on the country report
information. The Group risk report is discussed
in the Executive Committee meeting before
presenting to the Group ARC where the risk report
is scrutinised and recommendations are made
for improved risk management.
Read the principal risks on pages 39 to 47
Read the viability statement on page 83
Risk appetite
Risk appetite, or the amount and type of risk that
the Group is willing to accept, tolerate, or expose
itself to in pursuit of its business objectives, is
set at a level to avoid loss, fraud and operational
inefficiencies. The Group establishes its risk appetite
to provide direction and set boundaries for risk
management across its microfinance institutions.
The Group targets more conservative financial and
prudential ratios than required by regulators in the
countries of operation whilst ensuring full compliance
with all local regulations and laws. The Group also
has zero tolerance for any unethical, illegal or
unprofessional conduct and maintains a zero appetite
for association with any disreputable individuals.
The Group evaluates its risk appetite on a quarterly
basis. The Group first identifies and reports its risk
appetite at the microfinance institution level, where
a financial target is established and a risk appetite
benchmark is produced by each microfinance
institution and submitted for consideration to senior
management at the Group’s corporate headquarters.
At the Group level, each microfinance institution’s
risk appetite report is evaluated, and the Group
establishes an overall risk appetite that is later
implemented across its operating countries.
Risk appetite statement
ASA International has a moderate risk appetite.
We strive for a balanced approach, accepting risks
associated with investing in microfinance operations
in emerging markets while prioritising prudent risk
management to safeguard the interests of our clients,
investors, and stakeholders. Our commitment to
a high level of compliance, strict adherence to well
defined operational procedures, and a focus on
sustainable financial inclusion are the basis of our
dedication to achieving social economic impact
for our clients and generating sustainable financial
returns for the Company.
Board
role
Risk management is central to the Group’s
business model.
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Risk management continued
Three lines of defence
The first line of defence is the branch staff and area,
regional and district managers at the microfinance
institution level who are responsible for the client
risk assessment, client retention and credit risk. The
Country Heads and the Group’s senior management
ensure proper implementation of control activities,
policies and procedures.
The second line of defence at the Group’s subsidiaries
provides guidance and oversight of the activities
performed by the first line of defence. It includes
internal oversight functions such as Compliance, Risk
Management, and the Fraud and Misappropriation
Prevention Unit (‘FMPU‘). Other departments,
including IT, HR and Finance/Accounts also play
an important role in the second line of defence.
The third line of defence is Internal Audit at both
the Group level and the microfinance institution
level. In addition to regularly performing internal
auditing activities, Internal Audit ensures that all
units responsible for managing risk are performing
their roles effectively and continuously.
For more information about the Group’s three
lines of defence, visit the website.
Principal risks
Details of the Group’s key risk management areas
can be found on page 39. This section should not
be regarded as a complete and comprehensive
statement of all potential risks and uncertainties
faced by the Group but rather those which the
Group currently believes may have a significant
impact on its performance and future prospects.
Emerging risks
Emerging risks are potential threats or uncertainties
that have recently emerged or developed, often
characterized by their unpredictability and potential
for significant impact. ASA International conducts
quarterly risk assessments at all entities, which are
performed by the respective risk officers and
reviewed by the entity level Risk Management
Coordination Committee. During these assessments,
emerging risks are discussed and if a risk is identified
that is not covered by the Group risk taxonomy, it
is communicated to the Group. On an annual basis,
the Group Risk Management function reviews and,
if necessary, updates the risk taxonomy to include
any newly identified emerging risks, and senior
management discussions during the Group-level
EXCO, ALCO or ARC meetings may also serve as
a source for identifying emerging risks. In addition,
the Group Risk Management function is subject to
internal audit, which may result in recommendations
to identify certain emerging risks as part of the
internal audit review process.
Two emerging risks have been identified. In 2023,
Ghana and Sierra Leone saw inflation surpassing
100% over three years, prompting the adoption
of hyperinflation accounting in the Group’s financial
statements, leading to non-cash adjustments.
Pakistan could follow suit in 2024, with Ghana,
Sierra Leone, and Nigeria being monitored.
Starting April 2024, Myanmar’s new Military
Conscription Law mandates military service for
men (18-35) and women (18-27), except women
with children. This may affect some clients and
staff members. This is being closely monitored.
Three lines of defence
Board of Directors
Board establishes the risk strategy and regularly reviews risk appetite.
Approves frameworks, methodologies, policies and responsibilities.
Operational management
First line of defence
Line management in each
business area
The primary responsibility
is to own and manage risks
relating to daily operations
Risk management,
Compliance and FMPU
Second line of defence
Internal oversight functions
To identify risks in the daily
operations and provide
an independent oversight
role to the first line
Supports and challenges
the first line
Internal Audit
Third line of defence
Internal Audit function
To provide objective and
independent assurance on the
first and second line functions
38 ASA International Group plc
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1.1
1.7
1.2
1.3
1.5
1.6
1.4
2.2
2.1
2.3
3.1
3.2
3.33.4
4.3
4.4
4.1
4.2
5.1
5.2
5.3
5.4
5.6
5.5
5.7
Financial Statements Additional InformationGovernance Report
Strategic Report
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1.1 Credit risk
1.2 Liquidity risk
1.3 Exchange rate risk
1.4 Inflation risk
1.5 Interest rate risk
1.6 Concentration risk
1.7 Tax compliance risk
2.1 Regulation
2.2 Product transparency
2.3 Anti-money laundering risk
4.1 Human resource risk
4.2 Fraud & Integrity risk
4.3 Business contingency
4.4 Health & Safety risk
Risk management continued
1. Financial risk
3. Strategic risk
5. IT risk
2. Legal & Compliance risk
4. Operational risk
3.1 Growth risk
3.2 Competition risk
3.3 Reputation risk
3.4 Climate risk
5.1 Business continuity
5.2 System vulnerability
5.3 Data privacy & protection
5.4 IT support
5.5 System access control
5.6 IT fraud
5.7 Data migration
Principal risks
The Group faced challenging financial
conditions in some operating
subsidiaries, particularly affecting
liquidity, exchange rate, inflation
and growth risks.
The Group has updated its risk taxonomy and added new
risks in 2023. The risks added were inflation, concentration,
tax compliance, business contingency, anti-money
laundering (‘AML’) and data privacy and protection risk.
The heat map shows all the risks in the risk framework
and the principal risks section provides more detail on
these risks. Compared to last year, credit risk, climate risk,
IT business continuity risk and system access control
risk have decreased, while growth risk has increased.
Risk level
Low
When the risk is within the tolerance level of the organisation and
may cause insignificant impact on achieving the goals and objectives,
or may have minor impact from a financial, legal, regulatory and
reputational standpoint.
Medium
When the risk is at the borderline of the tolerance level of the organisation
and may cause moderate impact on achieving the goals and objectives,
or may have moderate impact from a financial, legal, regulatory and
reputational standpoint.
High
When the risk crosses the tolerance level of the organisation and may cause
significant impact on achieving the goals and objectives, or may have a
major impact from a financial, legal, regulatory and reputational standpoint.
Risk map
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Strategic Report
Risk management continued
Principal risks continued
Risk Risk grade and level of change Change in 2023 How we mitigate our risks/next steps
1. Financial risk
1.1
Credit risk
The risk that the Company will incur a loss because
its clients or counterparties fail to discharge its
contractual obligations.
Objective
The Company aims to ensure that the portfolio
at risk is kept at a minimum percentage at all times.
Med
• The Group’s portfolio at risk has reduced compared to the
previous year. However, PAR is still high in India, Myanmar,
Nigeria, Sierra Leone and Rwanda.
• Pakistan, Ghana, Kenya and Tanzania reached high portfolio
quality with PAR>30 days less than 1%.
• Although PAR > 30 remains a risk due to external factors, the
Group is confident it can reduce it based on past experience.
• Due to the economic challenges, including increased energy
and food prices, the Company will remain prudent in its
disbursements, carefully monitoring debt levels of clients.
• The Company strictly follows the ASA Model’s operating
procedures, including setting risk limits per borrower, taking
security deposits where possible, preventing over-borrowing
and excessive geographic concentration.
• The Group continuously monitors portfolio changes and takes
immediate action.
• Country-specific efforts to increase collections and reduce
PAR are taken.
1.2
Liquidity risk
The Company’s operations may be impacted if it
is unable to meet its payment obligations when
it falls due under normal and stress circumstances.
Objective
To manage liquidity risks and avoid loss of business,
missed opportunities for growth, or legal or
reputational consequences.
Med
• The Group has maintained its liquidity position during the
year and successfully met the liquid asset regulatory
requirements in-country jurisdictions. Meeting the funding
requirements in some of the Asian countries, including India,
Sri Lanka and Myanmar, proved difficult due to specific
country circumstances.
• Exchange losses during the year affected the Group dividends
received from operating subsidiaries. However, the Group
continued to raise a substantial amount of debt funding both
at the country and holding level during the year. Funding costs
across the Group stabilised in 2023 compared to 2022 as
benchmark rate increases in some markets were tempered
by improved pricing on funding from local sources.
• The Group has a strong funding pipeline of USD 171 million.
• Although economic uncertainty may impact funding markets,
the Company is diversified across thirteen countries with
good access to a wide range of funding sources at both local
and holding levels.
• The Company is approaching new potential funders
to broaden partnerships across markets.
• The Company maintains solid relationships with its debt
providers, who continued to show strong interest in funding
its operations at both local and holding level.
• The Company remains vigilant towards the deterioration
of its loan portfolio that may lead to liquidity concerns.
• The Asset Liability Committee (‘ALCO’) Committee regularly
reviews the cash and liquidity position of the Group.
1.3
Exchange rate risk
The Company may suffer a financial loss arising
from adverse movements in foreign exchange rates.
Objective
To manage currency risks and minimise loss due
to foreign currency exposure.
High
• The local currencies of some of the countries saw increased
vulnerability against the USD. During the year, local
currencies have sharply depreciated against the USD,
mainly in Ghana, Nigeria, Pakistan, Sri Lanka, Myanmar
and Sierra Leone.
• Depreciation of currencies reduced the reported Outstanding
Loan Portfolio (‘OLP’) and Gross OLP/Client figures in USD.
• Overall, the currency movements resulted in an increase
of the FX translation reserve losses.
• The Group has existing hedge relationships and manages
its currency risk through natural hedging, i.e. by matching
the relevant microfinance subsidiary’s local currency assets
with local currency liabilities, and by obtaining funding
denominated in local currency.
• For USD funding to the subsidiaries, the Company continues
to ensure that close to 100% of its currency exposure is
hedged. The Group’s equity positions are unhedged.
• The currency movements of the Company’s operating
currencies against the USD remain unpredictable.
• The ALCO regularly reviews exchange rate risk.
Level of change key
 Risk decreasing
 Risk remains stable  Risk increasing
40 ASA International Group plc
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Strategic Report
Risk management continued
Principal risks continued
Risk Risk grade and level of change Change in 2023 How we mitigate our risks/next steps
1. Financial risk continued
1.4
Inflation rate risk
The Company’s profitability or operational cost
may be impacted by the rise in inflation rates.
Objective
To limit the impact by controlling expenditure
and adjusting the loan size.
High
• There is high inflation rate in some of the countries including
Pakistan, Myanmar, Nigeria, Ghana, Sierra Leone and Zambia
• This situation is reducing the purchasing power of our target
clients as well as employees and adversely impacting their
day-to-day lives.
• High inflation is increasing the overall cost of the company.
• Ghana and Sierra Leone saw inflation surpassing 100%
over three years, prompting the adoption of hyperinflation
accounting in the Group’s financial statements, leading
to non-cash adjustments. Pakistan may follow suit in 2024,
with Ghana, Sierra Leone, and Nigeria being monitored.
• The loan size is reviewed on a regular interval and increased
if needed.
• Salary of employees are reviewed periodically and increment
is given.
• Non-essential costs are avoided to control cost.
1.5
Interest rate risk
The Company’s profitability or results of operations
may be impacted by fluctuations in interest rates.
Objective
To limit the impact of interest rate movements
and exposure to financial counterparties.
Med
• Borrowing costs are increasing globally. They are expected
to rise further, considering economic downturn. The Cost
of borrowing for the Group has gone up.
• As a result, there is increased hedging cost in some markets.
• The Company continuously negotiates with its lenders
and interacts with regulators.
• The interest rate caps in India and Sri Lanka were removed
and the Company increased its rates in these markets.
• The Company’s strategy in evaluating and managing its
interest rate risk is to conduct a cost of funds analysis and
to monitor interest rates in those countries where there
is a limit on the amount of interest it may charge.
• The ALCO regularly reviews interest rate risk.
1.6
Concentration risk
High concentration of portfolio in a specific
geographic area may amplify the impact of adverse
economic events.
Objective
To ensure that the portfolio of the Group is well
diversified.
Med
• A high percentage of the total OLP is concentrated in
4 countries; Pakistan, Philippines, Ghana and Tanzania.
• Earnings Before Tax (‘EBT’) concentration is highest for
Pakistan and Ghana. Management is focusing on growing the
business in other countries to reduce the EBT concentration
level in Pakistan and Ghana.
• Portfolio of the Group is diversified across 13 countries.
• Country portfolio is diversified across various regions and
sectors/industries.
• Group has introduced a concentration risk policy which will
monitor the concentration risk and help to improve the
diversification percentage.
• The ALCO regularly reviews concentration risks.
1.7
Tax compliance risk
The Group may face adverse consequences due
to failure to adhere to tax laws and regulations.
Objective
To ensure compliance to applicable tax regulations
at all times.
Low
• The Group prioritises compliance and proactively ensures
compliance to tax related matters at all times.
• The Group stays updated on tax regulations, and maintains
detailed records to minimize the risk of non-compliance
and potential penalties.
• The Group has engaged external tax consultants to seek
advice on critical matters.
Level of change key
 Risk decreasing
 Risk remains stable  Risk increasing
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Risk management continued
Principal risks continued
Risk Risk grade and level of change Change in 2023 How we mitigate our risks/next steps
2. Legal & Compliance risk
2.1
Regulation
The Company may suffer losses or fail to optimise
profitable growth due to regulatory changes
or through political activism.
Objective
The Company aims to ensure that effective
arrangements are in place to comply with legal
and regulatory obligations at all times.
Med
• ASA Pakistan received a microfinance banking licence from
the State Bank of Pakistan, which comes with increased
compliance requirements.
• Kenya has applied for Digital Credit Provider (‘DCP‘) licence.
The Central Bank has accepted the application and requested
additional information.
• In Nigeria and Rwanda, a PAR 30 days’ breach was reported
against the regulatory limit of 5%.
• Pakistan will proactively continue to ensure compliance with
the Central Bank.
• Kenya is closely following up with the authorities regarding
approval of the DCP licence.
• In Nigeria and Rwanda, recovery efforts have been increased
in the branches with high PAR.
• Tanzania is expected to apply for a deposit-taking licence
in 2024.
2.2
Product transparency
This risk refers to negative public opinion for not
ensuring product transparency.
Objective
To ensure that loan officers and branch managers
always take necessary steps to ensure transparency
regarding products and services.
Low
• There have not been any significant changes in this area.
However, in some countries there is increased scrutiny
by regulators and markets on the transparency of
services provided.
• Our service is offered in a client-friendly and transparent
manner. The Company adopted the SMART principles, which
are a common standard in the industry.
• The Company strives to meet the highest standard in terms
of Client Protection Principles and business transparency.
• Client feedback is collected on a regular basis to improve
client interaction.
2.3
Anti-money laundering risk
Threat arising from inadequate measures to prevent
and address anti-money laundering (‘AML’).
Objective
To ensure that anti money laundering procedures
are well established.
Low
• Risk is inherently low due to the nature of small loans.
• Money laundering-related incidents are very rare.
• AML policy is in place and AML officers are appointed
at the entity level.
• A rigorous Know Your Customer (‘KYC’) procedure
is established.
• Suspicious transactions reporting procedure is in place.
Level of change key
 Risk decreasing
 Risk remains stable  Risk increasing
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Strategic Report
Risk management continued
Principal risks continued
Risk Risk grade and level of change Change in 2023 How we mitigate our risks/next steps
3. Strategic risk
3.1
Growth risk
All risks and challenges associated with the
Company’s operational expansion.
Objective
The Company aims to meet its business expansion
plan in a controlled manner.
High
• ASA India reduced its portfolio in line with principal decision
and to comply with prudential regulations, limiting the
disbursement of fresh loans.
• The political situation in Myanmar and associated
governmental measures curbed business.
• In Sri Lanka, growth was stalled due to political and
economic instability.
• Heightened security challenges due to religious/ethnic clashes
in Eastern and North Western Nigeria.
• Ghana & Sierra Leone met the criteria for hyperinflation
accounting in 2023, Pakistan & Nigeria may meet the criteria
in the coming year.
• The strategy in India continues to focus on shrinking OLP,
recovering overdue loans, and controlling costs.
• New loans are not being disbursed in the high-risk zone
of Myanmar. Six branches in this zone have been closed.
• The Company closely monitors the political developments
in Myanmar and Sri Lanka. Economic and political stability
is returning in Sri Lanka.
• New branches in Nigeria are selected with strict adherence
to the expansion plan, to avoid security concerns.
• All pandemic-related restrictions have been lifted.
3.2
Competition risk
The Company may suffer losses or fail to optimise
profitable growth by not responding well to the
competitive environment or failing to ensure
its proposition meets customer needs.
Objective
The Company aims to ensure it understands
competitive threats and continues to focus
on the needs of its clients.
Med
• Competition has remained stable or decreased in some
markets, possibly due to the impact of the Covid pandemic on
the MFI sector. Some competitors faced bankruptcies during
the pandemic. Digital lenders and services remain active in
African countries, creating competition on the digital frontier.
• The Company’s portfolio reduction strategy in India has
resulted in the loss of clients to competitors.
• The Company emphasises the importance of building
and sustaining robust client relationships and customises
its products and services to cater to clients’ needs.
• The Company continuously monitors client satisfaction.
• In anticipation of a future with increasingly cashless
transactions, the Company is developing a digital financial
services platform, which over time also will include a range
of digital financial services.
3.3
Reputation risk
The Company may suffer financial or reputational
damage due to possible misconception of the quality
of its services.
Objective
The Company aims to be fully aligned with the
long-term interests of its clients.
Low
• The Company has not faced significant reputational issues.
• The Company strengthened its relationships with clients
and communities by investing in community projects in
operating countries.
• The Company’s clearly defined corporate values and ethical
standards are communicated throughout the organisation,
its customer base and other stakeholders.
• The Company’s impact is measured via the Client Economic
Yield survey (‘CEY’).
Read more about impact on page 13 and in the ESG report
on page 48
• The Company maintains close relationships with clients
and the broader communities in which it operates.
• The Company is highly supportive of the establishment
of local credit bureaus.
Level of change key
 Risk decreasing
 Risk remains stable  Risk increasing
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Risk management continued
Principal risks continued
Risk Risk grade and level of change Change in 2023 How we mitigate our risks/next steps
3. Strategic risk continued
3.4
Climate risk
The risk related to potential negative impact
of climate change on the organisation.
Objective
The Company aims to have a strong commitment
towards environmental sustainability, lowering
emissions’ and have procedures in place to respond
to risks associated with climate change.
Low
• The Company is committed to environmental sustainability
and aims to reduce its adverse impact on the environment.
It monitors its carbon emissions and is in the process of
implementing initiatives across all its subsidiaries to reduce
its overall GHG emissions.
• Severe natural calamities, including flooding, storms and
droughts, were observed in Myanmar, the Philippines,
Kenya, Rwanda and Uganda during the year, impacting
branch operations. However, the financial impact of climate
change and natural calamities was not material in 2023.
• The Country Heads have taken proactive measures to address
climate issues, including appointing a dedicated climate
officer, establishing a governance structure, setting SMART
targets for reducing carbon emissions, and developing
an action plan.
• Initiatives taken during the year included tree plantation,
installation of solar panels, purchase of electric motorbikes
and use of LED lights’ among others.
Read more in the Taskforce for Climate-related Financial
Disclosures (‘TCFD’) statement on pages 58 to 63
• The Company remains in close contact with clients during
natural calamities and supports them with relief efforts.
Read more about how the Company supports clients during
calamities on page 55
4. Operational risk
4.1
Human resource risk
The Company’s strategy may be impacted by not
having sufficient skilled people or being unable
to retain key people and not treating them in
accordance with the Company’s values and ethical
standards.
Objective
The Company aims to have sufficient personnel
to ensure meeting its growth objectives.
Med
• Staff drop-out reduced during the pandemic, and retention
rates were strong across the Group. However, annual staff
retention rates in the Philippines and Myanmar were lower
compared to other countries.
• It was observed that there was a shortage of skilled workers
predominantly in Myanmar, Sri Lanka and Sierra Leone.
• The Company continued to hire additional IT staff to support
the rollout of its digital strategy.
• There were no incidents of employee strikes or disruption
in any of the subsidiaries during the year.
• The Company ensures that remuneration is competitive
and carries out regular reviews besides annual increments.
• The Company continuously monitors performance which
allows career growth for high-performing employees.
• Staff can file any complaints or misconduct experienced
at a Grievance Mitigation Committee (‘GMC’).
Level of change key
 Risk decreasing
 Risk remains stable  Risk increasing
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Risk management continued
Principal risks continued
Risk Risk grade and level of change Change in 2023 How we mitigate our risks/next steps
4. Operational risk continued
4.2
Fraud & Integrity risk
The risk of incidents of fraud and misappropriation
by staff or client.
Objective
The Company aims to have procedure in place
to prevent and detect fraud & misappropriation
events carried out by staff or clients.
Med
• As at December 2023, the overdue balance is high in some
of the countries which increases the risk exposure.
• Absence of biometrics in IT platform increases the exposure
to fraud and misappropriation.
• Due to the deteriorating law and order situation in Myanmar,
robbery incidents have increased.
• The escalation of living expenses due to inflation may lead
to higher levels of attempted fraud.
• Regular visits by the Fraud and Misappropriation Unit
(‘FMPU’) and Internal Audit team take place to identify
and prevent fraud.
• FMPU members conduct an awareness programme
at branches to discourage fraud and misappropriation.
• FMPU members recommend appropriate disciplinary
measures for the perpetrators in accordance with entity
policy, take necessary actions to recover the misappropriated
amount, and pursue legal action, if necessary.
4.3
Business contingency risk
Potential adverse effects on operations resulting
from unexpected events or disruptions.
Objective
The Company aims to ensure that there is adequate
business contingency planning for smooth running
of operations.
Low
• Business contingency risk is generally low as the Group has
a redundant server and data recovery site at all entities.
AMBS is real time and can be accessed remotely.
• In the Philippines, natural calamities often disrupt branch
operations. However, the calamity is seasonal and branches
remain prepared for it. See the climate risk.
• As per current practice, remote working will be enabled
in case head office becomes inaccessible due to a
catastrophic incident.
• We have secure Disaster Recovery (‘DR‘) sites either
on premise or on cloud at all the entities.
• If a branch becomes inaccessible due to a disaster, activities
can be conducted from the nearest safe branch.
4.4
Health & Safety risk
Potential harm or injury to employees arising
from workplace conditions or activities.
Objective
The Company aims to ensure a safe and secure
work environment for its staff.
Low
• On 11 January 2023, Uganda declared that the Ebola disease
outbreak caused by the Sudan ebolavirus was over.
• On 5 May 2023, the head of the UN World Health
Organization (WHO) declared an end to COVID as a public
health emergency.
• There were 178 accidents, resulting in five fatalities, across
all the subsidiaries this year. Incidents related to motorcycle
accidents were most common.
• The Company ensures valid licences, safety equipment
and road safety awareness among employees to mitigate
the risk exposure of road accidents.
• Operating countries with increased incident rates will
strengthen their vigilance on health and safety to minimize
fatalities and accidents and will reiterate this during
staff trainings.
• Movement restrictions are applicable to employees in areas
that are very prone to robbery incidents.
Level of change key
 Risk decreasing
 Risk remains stable  Risk increasing
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Strategic Report
Risk management continued
Principal risks continued
Risk Risk grade and level of change Change in 2023 How we mitigate our risks/next steps
5. IT risk
5.1
Business continuity
The risk of system unavailability.
Objective
The aim of the Company is to ensure that systems
are available within a reasonable time.
Low
• All countries have Disaster Recovery (‘DR’) sites, either
on premise or on cloud.
• Yearly DR drills ensure smooth functioning of the process.
5.2
System vulnerability
This risk is associated with the vulnerability
to different types of cyber-attacks.
Objective
The Company aims to ensure that the IT stack
is protected against vulnerabilities.
Low
• Yearly third-party Vulnerability Assessment and Penetration
Testing is done.
• There is deployment of endpoint detection and response,
regular patch management, and use of an intrusion prevention
system in the firewall.
• Quarterly review of all firewall configurations
and Vulnerability Assessment by the internal team.
5.3
Data privacy & protection
Risk arising from unauthorised access
to sensitive information.
Objective
The Company aims to ensure data security
and confidentiality at all times.
Low
• Risk is low as the customer data and other sensitive data are
well protected and accessible to only authorised personnel.
• Increased scrutiny by regulators on data protection.
• Only authorised individuals are allowed to get access
to sensitive data.
• System data is protected by password.
• Employee training includes the importance of customer
data privacy.
• Active directory is regularly reviewed.
5.4
IT support
This risk refers to speed and quality of resolving
IT issues with operational impact.
Objective
The Company aims to have procedures and resources
in place to address and resolve IT support issues.
Low
• There may be delays in IT support sometimes due
to the nature and complexity of problems.
• Sourcing and retaining experienced IT Staff in Dhaka
and across countries remains challenging.
• Blocking issues are resolved in the same or next working day.
Other issues are resolved in a longer time. Some exception
may happen depending on the complexity of the problem.
Level of change key
 Risk decreasing
 Risk remains stable  Risk increasing
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Strategic Report
Risk management continued
Principal risks continued
Risk Risk grade and level of change Change in 2023 How we mitigate our risks/next steps
5. IT risk continued
5.5
System access control
This risk is associated with misuse of system access.
Objective
The Company aims to have strong password
management system in place to prevent any misuse
of access.
Low
• Implementation of two factor authentication (‘2FA’) in AMBS
has reduced password sharing incidents. For login into the
system, OTP is sent via email for enhanced password security.
• 2FA is has been rolled out across all markets.
• Standard password policies are implemented in the system
and software. Password policy is reviewed periodically
and improved as appropriate.
• Awareness programs are in place for not sharing password
and other security concerns.
5.6
IT fraud
This risk refers to the threat of fraud due to control
gaps in IT systems and processes.
Objective
The Company aims to ensure that discrepancies
between system and procedures are identified
and mitigated to prevent IT Fraud.
Low
• So far, IT fraud incidents were not reported in the year 2023.
• Digital financial services may create scope for digital fraud
in the future.
• Incidents of digital fraud may happen in future. All relevant
teams will remain vigilant to prevent and escalate such cases.
• Maker checker system is active in AMBS.
• Audit trail feature is active in AMBS.
5.7
Data migration
This risk refers to the possible loss of data during
data migration.
Objective
The Company aims to ensure that adequate
measures and back-ups are in place to prevent
possible data loss in data migration projects.
Med
• All subsidiaries will migrate over time from AMBS
to a Core Banking System (‘CBS‘). Pakistan and Ghana
are migrating first.
• In India, migration has been completed from AMBS
to Craft Silicon.
• Tanzania and Kenya are expected to be next in line
for CBS implementation.
• The Group is using a industry leading migration tool.
• The Group has acquired a highly skilled implementation
and migration vendor and has employed in-house
migration experts.
• Migration runbook includes multiple validations of
migrated data by business teams and sign-off by responsible
Head of Departments
Level of change key
 Risk decreasing
 Risk remains stable  Risk increasing
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Strategic Report
ESG report
Environment
Environment encompasses areas that are
affected by environmental factors, which is
a two-way relationship that involves both the
impact of the Company on the environment and
the impact of the environment on the Company.
Social
Social denotes the Group’s approach to
managing relationships with colleagues, clients
and communities.
Governance
Governance pertains to the various aspects
that promote good governance practices
and enable the Group to establish itself
as a responsible business.
Read more on page 56 Read more on page 50 Read more on page 68
Committing to
sustainable practices
and responsible
business operations
This Environmental,
Social, andGovernance
(‘ESG’) report provides
an overviewoftheESG
performance of the
Company,highlighting
its commitment to
sustainablepractices
and responsible
business operations.
Throughout 2023, the Company has made strides
insettingandachievingitsclimateandDiversity,
EquityandInclusion(‘DEI’)targets.ADEIpolicyhas
beenadopted.Surveysforclientsandcolleagues
haveundergoneathoroughreviewandprocesses
aimedatenhancingdataqualityhavebeenupdated.
ContentsBack
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Strategic Report
Reducedinequalities
Byofferingloanstowomen,theGroup
enables the use of disposable income
foressentialhouseholdneeds,suchas
education,health,nutrition,sanitation,
andhousing.Thissupportseconomic
development and leads to socioeconomic
progressinthecommunities.Additionally,
0.5%to1%ofoperatingcountries’profits
fundprojectsrelatedtohealth,education,
andrelief,benefitingthecommunities
whereourclientsresideandwork.
Industry,innovation
and infrastructure
The Company supports industry,
innovationandinfrastructureby
increasing the access of small-scale
enterprisestofinancialservices
and through the establishment of
anextensivebranchnetworkand
operationsacrossthirteencountries.
Decentworkand
economicgrowth
The Company provides socially
responsibleemploymentopportunities
to employees and services to its
clients.Theincreasedearningsofthe
Group’s clients are used to expand
theirbusinesses.Manyclientsbuyand
sell goods and the increased trading
activitybooststhelocaleconomy.
ReadmoreabouthowtheCompany
supports colleagues on page 52
Gender
Aswomengenerallyhavegoodloan
repayment behaviour and money
management, the Group is convinced
thatbyservingprimarilywomenthrough
business loans, the Group enhances
thesewomen’sindependenceand
decision-making stature at home and
intheircommunities.Additionally,the
Companyiscommittedtoproviding
gender-neutralopportunitiesfor
employmentandpromotion.
No poverty
TheCompanyiscommittedtomaking
asocialimpact,beingamicrofinance
institutionprovidingsociallyresponsible
financialservices,suchasloans,
targetedatpredominantlylow-income
female,smallbusinessowners.The
Company is driven by advancing
financialinclusion,byincreasingthe
numberoffemalelow-incomemicro-
entrepreneurswithlittleornoaccessto
formalised credit resources, increasing
self-employmentopportunities,
andthereby,alleviatingpoverty.
ESG report continued
Throughitsresponsiblebusinessmodel,theGroupactivelysupports
theUN’ssustainabledevelopmentagenda,workingmostactively
towardsthefollowingSustainableDevelopmentGoals(‘SDGs’).
ReadmoreaboutourSociallyresponsiblebusinessmodelonpages12and51
Alignment with UN SDGs
Other UN SDGs supported
Through its community projects and environmental
commitments, the Company aims to contribute, albeit on a
smallerscale,tothepreventionofhunger,goodhealthand
well-being,qualityeducation,cleanwaterandsanitation,
sustainablecitiesandcommunities,climateactionand
partnershipsforthegoals.
Read more on pages 54 to 55 and 57
Target focus areas:
SDG1:1.2,1.4,1.5
Target focus areas:
SDG5:5.5,5.a,5.b
Target focus areas:
SDG8:8.3,8.5,8.10
Target focus areas:
SDG9:9.3,9.4
Target focus areas:
SDG10:10.1,10.2
Total loans disbursed (USD)
965.1m
Employees
13.4k
Female clients
97%
Branches
2,016
Community projects spend (USD)
0.4m
Clients served
2.3m
Employee satisfaction rate
81%
Gender diversity employees
37%
Taxes (USD)
23.4m
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92%
91%
85%
94%
96%
96%
77%
S
ocial Strategy
C
ommitted Leadership
C
lient-centered Products and Services
C
lient Protection
R
esponsible Human Resource Development
R
esponsible Growth and Returns
E
nvironmental Performance Management
Financial Statements Additional InformationGovernance Report
Strategic Report
ESG report continued
Socially responsible
InlinewithASAInternational’spurpose,
the social aspect of ESG is engrained
initsdailyoperations.TheCompany
iscommittedtoactingresponsibly
and safeguarding the interests of its
stakeholderswhileadheringtohuman
rights.ThelendingASAModelisatthe
heartofhowtheCompanyservesits
clients,community,andcolleagues.
Universal Standards for
social performance
The Group’s average scores on the six dimensions of
the Universal Standards as part of the SPI assessment
ContentsBack
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Strategic Report
ESG report continued
on clientwell-beingandeconomicempowerment.
Highclientsatisfactionratesconsistentlyabove90%,
reflecttheeffectivenessofitseffortsinmeeting
and exceedingclientexpectations.Clientsexpress
particularsatisfactionwiththeloanapprovalprocess,
theloanduration,andtheinteractionwithloan
officers.TheSPIdemonstratesthattheGrouphas
a balancedperformanceacrossalldimensions,with
anoverallscoreof90%,scoringhighestonclient
protection,responsiblehumanresourcedevelopment
andresponsiblegrowthandreturns.Seethescore
perdimensiononpage50.
DuetoongoingimprovementstotheClient
EconomicYield(‘CEY’)questionnaire,theGroup
encountered data quality issues that prevented
disclosureofthisyear’sresults.TheGroupis
diligentlyreviewingthisprocesstoensureaccuracy
andreliabilityandplanstoresumereportingonthe
CEYnextyear.Inaddition,toenhancedataquality,
theGrouphasundertakenathoroughreviewand
updateprocessforthesatisfactionsurveysand
transitionedtothenewonlineSPIformat.Whilst
thefiguresmayappearlowerinsomecasesthis
year,theGroupbelievestheynowmoreaccurately
reflectitsoperations.
Readmoreabouthowthetoolsandindicators
forprotectingclientsarecalculatedonpages
172to173andseetheimpactoftheloanson
clients in our outcome indicators on page 03
Read more about the Group’s policies and
practicestoprotectclientsonpage66
Upholding Client Protection Principles
Transparency and accountability are fundamental
pillarsoftheGroup’sclient-centricapproach.It
adherestotheClientProtectionPrinciples(‘CPP’)
developedbytheSMARTCampaign,whichdescribe
theminimumprotectionthatmicrofinanceclients
shouldexpectfromtheirproviders,aswellasthe
protectionthataninstitutionshouldmaintainto
servethebestinterestsofitsclients.Aspartofits
commitmenttoupholdingclientprotection,the
Group evaluates its adherence to the CPP through
theClientProtectionStandardsasakeycomponent
ofitsSocialPerformanceIndicatorassessment.By
maintainingthehigheststandardsofclientprotection
across all aspects of their business, the Group fosters
trustandconfidenceinitsrelationshipswithclients.
Listening and responding to feedback
The Group values the feedback of its clients and is
committedtoaddressingtheirconcernspromptlyand
effectively.ThroughmechanismssuchastheClient
ComplaintResolutionCommittee(‘CCRC’),clients
haveaplatformtovoicetheirfeedbackandlodge
complaintsregardingservicesorstaffbehaviour.
Theseopenandtransparentcommunicationchannels
helptheGroupcontinuouslyimproveitspractices
andbetterserveclients’needs.
Measuring impact and ensuring client satisfaction
Measuringimpactandensuringclientsatisfaction
are paramounttotheGroup’smission.TheGroup
recognises that true success lies in the tangible
benefitsclientsderivefromitsservices.Throughtools
such as the Social Performance Indicator (‘SPI’) and
the Client Economic Yield (‘CEY’) survey, the Group
internallymeasurestheimpactofitsinterventions
TheGroupprioritizesthewell-
beingandempowermentofits
clients.Throughaholisticapproach,
it integrates principles of client
protectionandempowerment
acrossitsoperations.
Fostering financial inclusion
TheGrouprecognisestheimportanceofpromoting
financialinclusionasacatalystforsocioeconomic
progress.Toensurethatitsservicesremainaccessible
andaffordabletoall,theGrouprigorouslybenchmark
its loan interest rates against equivalent providers in
its operatingcountries,integratingcompetitivepricing
asanintegralaspectoftheASAModel.TheGroup’s
transparentpricingpolicies,alignedwithmarket
averages,reflectsitsdedicationtoprovidingvalue
to clientswhilesafeguardingitsfinancialinterests.
Empowering through responsible lending
Empoweringthroughresponsiblelendingiscentralto
theGroup’sethos,embeddedwithintheASAModel.
TheGroup’sloanofficersmeticulouslyassessthe
needsandcapacitiesofpotentialclients,notonly
evaluatingtheirrepaymentcapabilitiesbutalso
consideringthepotentialimpactofitsloansontheir
businessestopreventover-borrowing.Throughthis
approach,theGroupempowersclientstomake
informedfinancialdecisionsandunlocktheirfull
potentialforeconomicgrowth.
Protecting our clients
Client retention rate
75%
2022: 72%
2021: 74%
Client satisfaction rate
90%
2022: 93%
2021: 93%
Social Performance Indicator (‘SPI’)
90%
2022: 92%
2021: 91%
Read more on our KPIs page 24
Enhancingourhigh-touchmodelwithdigital
AstheGroupbeginstointegratedigitalservices,anew
chapterinitsfinancialinclusionjourneywillunfold,
enhancingtheclientexperiencewhileincreasing
efficiency.Digitalplatformsprovideclientswith
flexibility,reducingrelianceonfrequentgroupmeetings
andfreeinguptimetogrowthebusiness.Atthesame
time,itisimportanttomaintainthehigh-touchclient
model,withoccasionalgroupmeetingsproviding
opportunitiesforrelationshipbuilding,ideasharingand
learningamongmembersandloanofficers.Maintaining
thesemeetingshassignificantsocialandfinancial
benefits,mitigatingcreditrisk,facilitatingKnowYour
Customer(‘KYC‘)processesanduncoveringgrowth
opportunities.Thestrategicfusionofdigital
convenienceandface-to-faceinteractionwillenable
strongrelationshipswhiledrivingsustainablegrowth.
Readmoreaboutclientsbenefitingfromdigitalonpage
20andthebusinessmodelonpage12.
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Strategic Report
ESG report continued
Supporting
our colleagues
Implementing robust mechanisms for
addressing employee concerns
The Group has implemented robust
mechanisms to address employee concerns
andmaintainapositiveworkenvironment.
Employees are encouraged to report any
actionsthatmayviolatelaws,regulations,or
Companypoliciesthroughawhistleblowing
system.In2023,therewerenowhistleblowing
incidents reported across the Group,
demonstratingacultureofcompliance
and ethicalconduct.Tofurthersupport
transparency and accountability, the Group
establishedaGrievanceMitigationCommittee
(‘GMC’)toaddressappealsandcomplaints.
In 2023,theGMCreceivedatotalof11
appealsandfivedirectcomplaints.
Investigationsintothesecasesledto
correctiveactionssuchaswarnings,fund
recoveries, transfers, summary dismissals,
and terminationofcontracts.Preventative
measures include ongoing training sessions
andawarenessprogrammestoensure
employeesfeelsupportedandvalued.
Read more about our policies and
practicesonpages66to67
Encouraging growth and advancement
Promotionopportunitiesareextendedtoemployees
whonotonlydemonstrateleadershipqualitiesbut
also embody the Company values and core principles
oftheASAModel.Withastaffretentionrateof74%,
turnoverisconsideredlow,enablingmanyemployees
togrowwithintheCompany.In2023,1,348
promotionswererecorded,withasignificant
proportionbeingloanofficerspromotedtoassistant
branchmanagers.40%ofthetotalnumberof
colleaguespromotedarefemale.
Read more about employee development and
value embodiment on page 23
Prioritising employee satisfaction and well-being
Avitalaspectofsupportingcolleaguesisensuring
theirsatisfactionandwell-being.TheGroup
conductsanannualemployeesatisfactionsurvey,
withaparticipationrateofaround33%anda
satisfactionrateof81%.Feedbackfromthesurvey
informseffortstoenhanceprofessionalgrowth
opportunities,work-lifebalance,andoveralljob
satisfaction.Notably,thesurveyresultsindicate
that thevastmajorityofemployeesfeeltheywork
welltogether,aretreatedfairly,andfindtheirtasks
conducivetoprofessionalgrowth.Areasfor
improvementareparticularlyinpromoting
a healthier work-lifebalance.
To enhance data quality, the surveys conducted have
undergoneathoroughreviewandupdatingprocess.
Asaresult,whilefiguresmayappearlowerinsome
casesthisyear,theCompanybelievestheyarenow
morerepresentativeoftheoperations.
TheGroupiscommittedtofostering
asupportiveandinclusiveworkplace
environmentwherecolleagues
can thriveandgrowprofessionally.
Throughvariousinitiativesand
policies, the Group endeavours to
recruit, develop, and retain talent
whileensuringthewell-beingand
safetyofallemployees.
Recruiting young talent
TheGroupfocusesonrecruitingyounggraduates,
oftenfromruralorsemi-urbanbackgrounds,whoare
interestedinworkingwithlow-incomecommunities.
Despiteeconomicand/orpoliticalchallengesinsome
countries, the Group successfully onboarded a total
of4,465teammembersacrosstheiroperating
subsidiariesin2023.Tonurturetalent,theGroup
emphasises on-the-job training supplemented by
a comprehensive12-dayPre-ServiceOrientation
(‘PSO’)programme.DuringPSO,colleagueslearn
about the Company’s heritage, mission, core values,
Code of Conduct, HR policies, loan appraisal process,
clientselection,andfinancialprocedures,among
otheressentialtopics.In2023,8,559employees
underwentPSOtraining,equippingthemwiththe
necessaryknowledgeandskillstoexcelintheirroles.
Trainingcontinuestoplayapivotalroleascolleagues
advanceintoseniorpositions,coveringawiderange
ofareasincludinganti-moneylaundering,diversity
and inclusion, skill development, crisis management,
cybersecurity,digitalisation,androle-specific
training.In2023,theGrouprecordedatotalof
21,531trainingattendeesand67,107hoursof
training,underscoringitscommitmenttocontinuous
learninganddevelopment.
Employee satisfaction rate
81%
2022: 86%
2021: 85%
Staff retention rate
74%
2022: 76%
2021: 80%
Gender diversity
37%
2022: 35%
2021: 33%
Training hours
67,107
2022: 61,312
2021: 42,907
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2 4
42 161
13 12
4,895 8,335
Financial Statements Additional InformationGovernance Report
Strategic Report
ESG report continued
Promoting diversity and inclusion
AsaglobalCompanyactivein15countries,the
Groupcelebratesitsculturallydiverseworkforce.In
termsofgender,in2023,theoperatingsubsidiaries
represents37%oftheGroup’soverallfemale
representation,brokendowninEastAfrica:13.8%,
WestAfrica:9.0%,EastAsia:9.8%andSouthAsia:
4.0%.DuetoculturalreasonsinSouthAsiaand
safetyissuesrelatedtotravellingalone,hiringwomen
stillappearstobeachallengeinthisregion,which
impactstheGroup’soverallgenderrepresentation.
Thefemalerepresentationattheseniorleadership
levelatsubsidiarylevelis21%.Intermsofage,47%
of the Company’s employees are under 30 years old
and1%over50.
Effortstoimprovegenderrepresentationincludethe
formationofaDiversity,Equity,andInclusion(‘DEI’)
Committee,theapprovalofaDEIpolicy,andthe
establishment of goals and targets to improve gender
representationatvariousorganisationallevelsacross
allentities.Progressonthesetargetsisregularly
evaluated through progress reports and bi-annual
meetingswiththeDEIcommitteeandtheCEOs
of theoperatingcountries.Thesemeetingsnotonly
assess progress but also focus on addressing the
challengeswhentargetsarenotmet.Thesegoals
and targetshaveresulted,amongotherthings,in
an increaseoffemalesincommitteesandinterview
panels,aswellasthedevelopmentofDEItraining
and mentorship programs, reinforcing the Group’s
commitmenttofosteringaninclusiveworkplace
whereallemployeesfeelvaluedandrespected.
Ensuring employee health and safety
TheGroupcontinuestoprioritisetheimplementation
of strict protocols to ensure the Health and Safety
of itsemployees.Theseprotocolsincludetheregular
monitoring and control of health and safety risks, the
provisionofsafetyandawarenesstrainingandthe
enforcementofpreventivemeasures.Inaddition,a
three-tieredaccidentandincidentmonitoringsystem
isinplace,aswellastheintegrationofhealthand
safetycommitteesandoccupationalhealthchecklists
ineachoperatingsubsidiary,ensuringcomprehensive
supervisionandmonitoringthroughouttheGroup.
In responsetoworkplaceincidentsorillnesses,the
Group quickly implements emergency measures or
correctiveactions.Itisworthnotingthat178
accidentswererecordedduringtheyear,resulting
in fivefatalities.Thisrepresentsanincreasefrom
the previousyear,thus,inresponse,theGrouphas
proactivelyengagedcountrieswithhighaccident
ratestoimprovesafetymeasures.Despiterobust
safetymeasures,85%ofincidentsinvolved
motorcycles.
Read more about health risks on page 45
ASAIndia’sPrideandPower
Committeefosteringsolidarity
ThePrideandPowerCommitteeatASAIndia
emergedfrominformallunchtimechatsamong
femalecolleagues,evolvingintoaproactive
supportsystemforwomenintheworkplace.
With fourseasonedmembers,fromboththe
head officeandfieldoffices,theCommittee
embodiesasenseoftrustandaccessibility.
Monthlygatherings,whichcommencedin
December,serveasplatformsforcandid
discussions,celebratingpersonalvictoriesand
navigatingsharedchallenges.Theinaugural
sessiondrewanimpressivecrowdof170+
attendees,showcasingapalpableenthusiasm
for collectiveempowerment.However,itwas
duringthesecondmeetinginJanuarythatthe
Committee’simpacttrulycametolight.One
member courageously shared her experience,
sparkingawaveofsolidarityandprompting
otherstoopenupabouttheirownexperiences
on andofftheworkfloor.Theseexperiences
have propelledthecommitteetowardsexploring
inclusivegendersensitisationtraining
programmesforallemployees.
Number of Board Directors1
Readthediversitylistingruledisclosure
on page 86
1 IncludesNon-ExecutiveDirectors,excludedfromGroup
headcountcalculations.Figuresasat31December2023.
2 NotincludingDirectorsappointedontheBoardoftheplc.
3 Senioremployeesidentifiedasmaterialrisk-takerswhoarenot
DirectorsorsubsidiaryDirectors.
4 IncludessubsidiaryDirectorswhoareexcludedfromGroup
headcountcalculations.
Number of Independent Directors of subsidiaries2
Number of senior employees3,
other than Board Directors4
Number of employees, other than
Board Directors and senior employees
Female Male
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Education
Receiving quality education is a key
factor in advancing socioeconomic
progress and escaping poverty,
since higher levels of education are
associated with increased financial
independence and greater ability
to create wealth and participation
in the economy. Therefore, various
projects have been initiated which
encourage learning and
development, such as student
bursaries, distributing educational
materials and necessities to schools
and a tutoring programme called
‘ASA Pathsala’.
Health
Contributing to the health and
well-being of the community,
especially to that of the most
vulnerable, is a vital aspect of
improving their lives. The Company
conducts many different projects
in this field, such as wheelchair
distributions, health camps and
medical screenings in collaboration
with reputable health organisations.
To reduce waterborne diseases, the
installation of water filters, tanks,
treatment plants and boreholes
at schools or in the communities
are organised.
ESG report continued
Our community
programmes
Our collaborative efforts with
partners and peers reflect our
commitment to the needs of
underprivileged communities,
in line with the Sustainable
Development Goals.”
Sazzad Hossain
Head of HR, Communications and
Sustainability, ASA International
The branches of the operating subsidiaries, being
an integral part of the communities in which they
operate, undertake social impact initiatives to fulfil
their commitment to social welfare. The initiative of
these projects predominantly lies with the field staff
at the branch level, as they maintain regular contact
with clients and the community and understand
their needs. To fund these activities, the Company’s
subsidiaries allocate a percentage of their profits,
typically between 0.5% and 1%, except in countries
such as India, where regulations stipulate a higher
percentage of 2%. The projects are highly regarded
by colleagues, clients and the wider community, and
focus on improving health, education, environment
or providing disaster relief.
UN SDGs
Impact indicators 2023
• Sevenwaterboreholesinstalled.
• 372peoplewithdisabilities
supported.
• 133healthcampsconducted
reaching approximately
17thousandpeople.
UN SDGs
Impact indicators 2023
• Overseventhousandattendees
ofASAPathsalaclasses.
• 491studentsreceivedabursary
orscholarshipfund.
• USD131kspentondonations
to schools directly reaching
34thousandchildren.
School donations in Sri Lanka
In Sri Lanka, a community project
centredonenhancingeducationand
nutritionforstudentswasconducted.
Throughthegenerousdonation
of studymaterialsandnutritious
school lunches, up to 425 students
benefitedacrosssixactivities.
By providingessentialresources
and meals,theinitiativesaimed
to enhancelearningexperiences
and supportthewell-beingofthese
young learners, fostering a brighter
futureforthecommunity.
Breast cancer screen in Ghana
In Ghana, a free breast cancer
screeninginitiativewasconducted,
comprising19activitiesthatreached
over2,000womenacrossthe
country.Ledbyadoctorfrom
Korle-Bu Teaching Hospital,
participantsreceivedinstruction
on self-examinationandwere
encouraged to report any
irregularities.Severalwomen
identifiedduringthescreeningwere
referred for further mammograms
to facilitateearlydetection.This
programme, conducted during Breast
CancerAwarenessMonthinOctober,
operated under the theme ‘Keeping
Her in the Picture’, emphasising the
importanceofwomen’shealthand
earlyintervention.
USD spent
$428k
2023 performance
Initiatives
2,014
Programme participants
275k
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Environment
The Company is dedicated to cultivating resilient
communities, promoting environmental
stewardship, and building sustainable
environments for future generations. In alignment
with its environmental sustainability initiatives,
the Company spearheads tree planting projects
and recycling initiatives. These collaborative
efforts involve clients, colleagues, communities,
local governments, forestry commissions,
and schools. Together, they combat carbon
emissions, rejuvenate surroundings, and
fortify environmental resilience against
natural challenges.
ReadmoreaboutKenya’streeplantingprojects
onpages21and22
Disasterrelief
Efforts are diligently undertaken to promptly
respond to emergency situations, ensuring the
safety and well-being of our clients during times
of distress through robust capacity-building
initiatives. This entails equipping individuals with
essential resources to enhance their resilience
in the face of adversity. In the event of natural
disasters, our support encompasses the provision
of vital necessities, including food, shelter, and
medicine. Our commitment to relief extends
beyond immediate emergencies, addressing
foundational needs, such as food security
and access to adequate housing.
Aid amidst natural disasters in Myanmar
ASAMyanmarextendedvitalsupporttomembers
affectedbynaturaldisastersin2023.Despitethe
challengesposedbyCycloneMochaandtorrential
rainfall,ouroperationsacrosstheMagway,
Sagaing,Bago,Mon,andYangonregionsremained
committedtoaidingthoseinneed.Approximately
one thousand clients felt the impact of these
events,promptingourdedicatedstafftoswiftly
deliveressentialsupplies,includingfood,
medicines,drinkingwater,andcashaid,fostering
solidarityandsupportwithinourcommunity.
Cultivating collective responsibility and
environmental stewardship in Kenya
Inacollaborativeeffort,ASAKenyainitiated
a transformativetreeplantingproject,planting
10,500seedlingsandengaging2,880participants
acrossseveralcounties.Forming16partnerships,
ASAKenyaworkedcloselywithschools,
universities,andgovernmentofficials.Theproject,
drivenbycollectiveresponsibility,aimednotonly
toenhanceenvironmentalstewardshipbut
also to educateparticipantsonclimateaction.
The GovernmentofKenya’ssupport,catalysed
by thePresident’scommitmenttoclimateaction,
playedapivotalrole.ASAKenya’scommitment
to investinginenvironmentalinitiativesand
fosteringmeaningfulpartnershipscontinues
to drivefutureendeavours.
UN SDGs
Impact indicators 2023
• Approximately30thousandtreesplanted.
• 370plasticrecyclinginitiatives.
• Fivesolarsystemsinstalledincommunities.
UN SDGs
Impact indicators 2023
• Six thousand natural disaster relief programme
participants.
• 65thousandCovidprotectionprogramme
participants.
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Environmentally
responsible
Operatinginanenvironmentally
responsible manner requires the Group
to consider both its impact on the
environment and the environment’s
impactontheCompany.Thisdual
perspectiveiscrucial,particularly
in light oftheurgentneedtoaddress
climatechange.
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Promoting sustainable travel
TheCompanyactivelypromotesresponsibleand
sustainabletravelpractices,particularlyemphasising
eco-conscious decisions in air travel, as outlined in
its travelpolicyeffectiveDecember2022.While
acknowledgingtheimportanceofvisitingoperations
andengagingwithclientsandcolleaguesinperson,
theCompanyremainscommittedtominimisingits
environmentalimpact.Throughtheseefforts,the
Companyaimstoalignitstraveldecisionswithits
sustainabilitygoals.
Measuring greenhouse gas (‘GHS‘) emissions
The Company adheres to the Streamlined
Energy and CarbonReporting(‘SECR’)standard.
This initiativeenablestheCompanytodiscloseits
energyandcarbondata,facilitatingthemonitoring
of emissionsandenergyefficiencyeffortsovertime.
Through SECR, the Company ensures transparent
andconsistentreportingofitsenvironmentalimpact,
therebyidentifyingopportunitiesforfurther
improvementsinsustainabilityperformance.
Read the SECR report on pages 64 and 65
In pursuit of sustainability, the Group has initiated
efforts to diminish its environmental impact.
Identifying critical areas, they have enacted
short-term, focused measures to decrease carbon
emissions, enhance energy efficiency, and preserve
essential resources.
Read more about the Company’s emissions on 64
and its climate targets on page 62
Guided by ESMS and environmental policy
GuidedbyitsEnvironmentalandSocialManagement
System(‘ESMS’)andenvironmentalpolicy,the
Group iscommittedtoresponsibleenvironmental
stewardship.Theseframeworksoutlineclearpolicies
andprocedurestominimisenegativeimpactsand
promotesustainablepracticesacrossitsoperations.
Responsible investment practices
Through its exclusion list, the Group upholds rigorous
standardsforresponsibleinvestment.Byrefraining
fromfinancingactivitiesthatcouldharmbiodiversity
or the environment, the Group ensures that its
businesspracticesalignwithitsenvironmental
values andadheretointernationalconventions.
Mitigation of emissions Adaptation to climate change
The Group recognises that climate change poses
a risk to its operations and acknowledges the need
to address this risk. To ensure transparency and
accountability, the Company is committed to
aligning with the Task Force for Climate-related
Financial Disclosures (‘TCFD’) framework, enabling
disclosure to investors and stakeholders regarding
its strategies to manage climate-related risks
and opportunities.
Read the report on pages 58 to 63
Assessing natural calamity impact
The Group assesses the impact of natural disasters,
suchasfloodsandearthquakes,onitsresources
and overalloperations.Thisanalysisoffersvaluable
insightsintotheCompany’ssusceptibilitytosuch
calamities,identifyingareasthatmayrequire
adaptationtomitigaterisks.Theassessmentconfirms
thatsevenoftheoperatingsubsidiarieshavebeen
impactedby34naturalcalamitiesthisyear,with
operationalandfinancialimpactinninecases.
The Philippinesismostfrequentlyaffectedby
natural calamities,themajorityofwhichare
seasonal stormsandflooding.
Read more about disaster response on page 55
Emergency preparedness and response
The Emergency Preparedness and Response Plan
(‘EPRP’)iscrucialfortheCompany’sadaptation
efforts,particularlyinthefaceofincreasingnatural
disasters.Itsobjectiveistoprotectresources,clients,
andstaff,ensuringtheintegrityofcriticalinformation
andsustainingessentialoperationsandservices.
The planoutlinesstrategiesandproceduresfor
emergencymanagementandresponse.Withthe
EPRPinplace,theCompanycaneffectivelyprepare
forandmitigatetheimpactsofemergencysituations,
enhancingresilienceintimesofadversity.
Read more about the environmental policies
and practicesonpage66
Carbon footprint
8,574 tonnes of CO
2
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Task Force on Climate-related
Financial Disclosures (‘TCFD’)
As required by the FCA Listing Rules, ASA
International aligns with the Task Force on Climate-
related Financial Disclosures (‘TCFD’) on a comply
or explain basis to provide transparent data to
investors and other stakeholders about the material
risks and opportunities of climate change for the
Company. Disclosures are made consistent with
the Financial Conduct Authority (‘FCA’)’s Listing
Rule 9.8.6R(8) and the TCFD recommendations
and disclosures, except for the scenario analysis
and financed emissions, further explained
on pages 60 and 65. This is the third year the
Group is implementing and reporting on the
recommendations of the TCFD and is continuing
to mature its approach. In this report, the Group
shares the key developments and the status on the
four core elements of the TCFD recommendations.
Keyactivitiesin2023
Governance
Approved Terms of Reference
(‘ToR’)SustainabilityCommittee
andcontinuedBoardoversight
Readmoreonpage59
Strategy
Initiatedscenarioanalysis
discussions
Read more on page 60
Risk management
Climate risk considered quarterly
Readmoreonpages60and61
Metrics and targets
Mettargetsfor2023and
set targets for 2024
Read more on page 62
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Governance
Board oversight
• Boardoversightofandengagementwiththe
Company’ssustainabilityeffortsisakeypriority
andisensuredthroughtheactiveinvolvementof
theChiefExecutiveOfficerintheSustainability
Committee(‘SC’).
• TwoSCmeetingswereheldtodiscussprogress
and performance on Climate-related Risks and
Opportunities(‘CRROs’)in2023.
• TheBoardhasconsideredCRROsbyreviewing
the climate risk as part of the principal risks in the
Company’srisktaxonomyandriskframework.
• Progressonthesustainabilityeffortsisreported
totheBoardinquarterlyBoardmeetings.
• AllsubsidiarieshavecommittedtoBoard
oversightoftheirclimateactionplans.
The Group’s governance structure
provides clear oversight and
ownershipoftheGroup’s
sustainability strategy and
management of Climate-related
RisksandOpportunities.
Role of management
• Managementplaysanimportantrolein
assessing andmanagingtheCompany’sCRROs.
Thisinvolvescross-functionalmanagement
at boththe Groupandsubsidiarylevel.
• AllExComemberswiththeexceptionofthe
Head ofInternalAuditarepartofthe
SustainabilityCommittee.
• TheSustainabilityWorkingGroup,which
includes LeadershipTeammembersacross
variousfunctionssuchasrisk,finance,legal
and sustainability,supportstheSCbyproviding
regular updates on the Company’s sustainability
strategy.
• In2023,twomeetingswereheldwiththeSC
and subsidiaryManagingDirectorsto(i)present
progress on climate targets for 2023 and (ii)
presentclimatetargetsplansfor2024.Bi-annual
progressmeetingsarescheduledgoingforward.
• Managementreceivesregularprogressreports
towardsmeetingtheCompany’sclimatetargets,
allowingthemtomakeinformeddecisionsand
to ensurethattheCompany’soperationsand
initiativesarealignedwiththetargets.
• The SC has an approved the Terms of Reference
(‘ToR’).
Sustainabilityreportingstructure
Discussesprogressandperformanceonclimate-relatedtopics
and decisionmakingbi-annually.
Assessesandcross-functionallymanagestheCRRO’s.Proposesand
implementsclimate-relatedstrategicdecisionstodriveimprovement.
ReportstotheSC.
Responsiblefortheclimateactionplanandtheachievementof
climatetargetsatsubsidiarylevel.PresentstotheSCbi-annually
on progress.
AssessestheCRROsonthegroundandmanagestheimplementation
oftheclimatetargets.ReportstothesubsidiaryManagingDirector
andtotheGroupsustainabilitymanageronaquarterlybasis.
Subsidiary Managing Directors
Sustainability managers
Sustainability Committee
Sustainability Working Group
1
2
3
4
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concerning various climate-related scenarios,
includingatleastaqualitativeassessment.
Managementisawareofthisgapinregulatory
requirements and understands the importance
of fulfillingthisobligation.Severalfactorshave
contributed to its inability to conduct this analysis
thusfar.TheCompany’sprimaryfocushasbeenon
establishinggovernancestructures,implementing
arobustriskframework,andsettingtargets,
all of whicharefundamentalprerequisitesfor
conductingscenarioanalysis.Scenarioanalysis
initiativescommencedin2023,withtheaimof
completingscenarioprojectionsbyQ32024,
includingalignmentwiththe2Cscenario.
• TheCompany’sinitialgoaloffinalizingthescenario
analysisin2023wasimpededbythecomplexity
of itswidespreadgeographywithvastlydifferent
operatingenvironmentsandalackofcapacity,
in additiontodatamanagementchallenges.While
mosttransitionalandphysicalrisksareconsidered
tobelow,acuterisksareofmediumconcerndue
to theunpredictabilityandfrequencyofnatural
disasters, even if they do not have a material
financialimpact.Theseacuterisksarecarefully
monitored through its Natural Calamity Impact
assessment,includedinitsquarterlyriskreport.
Consequently, the company believes it is adequately
informed about its exposures in the short-term and
hasimplementedappropriatemeasureswithinits
currentoperatingmodeltomitigatetheserisks.
Effortsareunderwaytoenhanceitscapabilities
and addressdatamanagementchallengestoensure
completionoftheassessmentandthesubsequent
developmentofaresiliencestrategywithinthe
2024fiscalyear.ItistheCompany’sintentionto
achievecompliancewiththisdisclosurerequirement
intheforthcomingreportingcycle.
Managing CRROs
The Company’s current focus is on risk management
ofphysicalandtransitionrisks,asclimate-related
opportunitiessuchasresourceefficiencyarebeing
exploredaspartoftheemissionsmitigationefforts.
Managing physical risks:
• Naturalcalamitiessuchasfloods,cyclones,
droughts,earthquakes,volcaniceruptions,etc.
arecommoninsomeofthecountrieswherethe
Groupoperates.
• Risk management protocols are built into the
Group’soperationalprocedures,includingsite
selectionofpotentialnewbranches,takinginto
accountthevulnerabilitytonaturalcalamities.
• Natural disaster management procedures are
in placeattheentitylevel,includingstafftraining
for emergency response plans, postponement
of disbursementandcollectionuntilthesituation
stabilises, and loan repayment rescheduling or
moratoriumsforborrowersinextremecases.
Assistance/reliefisofferedtoborrowersunder
communityprojects.Readmoreonpage55.
Managing transition risks:
• TheGroupproactivelymonitorsandaddresses
regulatory or stakeholder requirements related
to greenhousegas(‘GHG’)emissionsinits
operationalcountries.Sofar,theoperational
countries are not facing any strict regulatory
or stakeholderrequirementsinthisfield.
• TheGroupiscommittedtoreducingitscarbon
emissions across all subsidiaries to be an
environmentallysustainableorganisation
and upholditsreputation.
• TheGrouphasapprovedSMARTtargetsforall
its subsidiaries,includinginitiativesforreducing
emission’ssuchassolarpanelinstallation,use
of E-bikes,useofLEDlightsandtreeplantation.
• A travel policy has been adopted to ensure air
travel is limited as much as possible to reduce
carbonfootprint.
Read more about targets on page 62
Integrating climate risks into overall risk management
To include climate-related risks into overall risk
management,thefollowingstepshavebeentaken:
• Risktaxonomyupdatedtoincludeclimaterisk.
• Riskmanagementframeworkupdatedtoinclude
a newsectionforclimateriskmanagement.
• Standard template introduced in all subsidiaries
foridentifying,assessingandreportingonclimate
risksonaquarterlybasis.
• Climateriskreportincludedintheriskreporting
packpresentedtotheARConaquarterlybasis.
• Climateriskisidentifiedandincludedasadistinct
principal risk as part of the broader risk
frameworkduetotheprevalenceofnatural
disastersinoperationalcountries,withpotential
furtherescalationduetoclimatechange.
Enhanced monitoring is necessary for both
physicalandtransitionaspectsofclimaterisk.
Thisriskintersectswithotherprincipalrisks:
adverse climate events can impact client payment
capacity,affectingcreditrisk;emissioncontrol
failurescanimpactreputationrisk;andnon-
compliancewithemergingenvironmental
regulationscanaffectlocalregulationrisk.
Read more about risk management on pages 37
and 38
Impact of CRROs on the organisation’s businesses,
strategy and financial planning
• Climate change is a part of the Group’s approach
tosustainabilityapprovedbytheBoardin2021.
• MajorsourcesoftheGroup’semissionswithin
scope1and2havebeenidentified.Afeasibility
studywascompletedin2022todeterminethe
opportunitiestomitigatethesemajorsources
of emissions.Feasibilityindicatorsassessed
includedmarket,economic,operational,
schedulingandtargetfeasibility.
• WithguidanceoftheGroup,basedonthe
outcomes of the feasibility study, concrete
mitigationproposalshavebeendefinedand
approvedatentitylevelfor2023and2024.
The consolidatedtargetsatGrouplevelcan
be foundonpage62.
• Theimpactonfinancialreportingjudgmentsand
estimatesarepresentedinnote2.5.1onpage
125.
• Directorshaveconcludedthatcurrently,the
impactoftherisksintheGroup’sfinancial
statementisnotmaterial.Certainadditional
investments planned to reduce the carbon
footprintoftheGroup–amountingto
approximatelyUSD650thousand–have
been consideredinfuturebusinessplans.
• TheCompanyacknowledgesitscurrentnon-
compliancewithBEIS-f1,whichentailsananalysis
of the resilience of its business model and strategy
The Group has taken various steps
to identifyclimate-relatedrisks,
determine the impact and factor the
risksintoitsfinancialplanning.The
risks have been integrated into the
Group’sriskmanagementframework
andareproactivelymonitored.
Identifying risks
• TheGroupusesaTCFDsubscribedframework
to classifyclimateriskandhasimplemented
standardisedtemplatesforidentifyingand
assessingclimaterisksacrossallitssubsidiaries.
• Each subsidiary has a risk management unit and
sustainabilitymanagerresponsibleforidentifying
climaterisksusingthestandardisedtemplate.
• Climate risks are assessed internally using a risk
scoring method based on both likelihood and
impact,asdefinedintheGroup’sriskmanagement
framework.Datarelatedtooperationaland
financialdamage(assessingmateriality)caused
by naturalcalamitiesisalsocollectedaspartof
theassessmentprocess.SeetheNaturalCalamity
ImpactAssessmenton page57.
• Theabove-mentionedreportsarereviewed
by thelocalriskmanagementcoordination
committeeandapprovedbytheCountry
Head beforebeingsubmittedtotheGroup.
• The Group climate risk management report
is preparedonthebasisofthecountryreports
andpresentedtotheAuditandRiskCommittee
(‘ARC’)quarterly.Climate-relatedrisksare
identified,assessedandreportedquarterly.
• TheGrouphasidentifiedshort-term,medium-
andlong-termclimaterisks.Long-termscenario
planningwillbecompletedin2024.
Strategy and risk
management
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ESG report continued
Strategy and risk management continued
Climate risk Risk description Risk level Financial impact Time horizon Comment
Transition risk
Legal &
regulatory
Risk of failing to comply
withregulatoryrequirement
relatedtocarbonfootprint/
GHGemissions.
Low None ST,MT,LT
• Riskgradeislowasnoneofthesubsidiarieshavedirectregulatoryrequirementsfromthelocal
governments/centralbanksrelatedtocarbonfootprint/GHGemissionsthatareapplicabletothe
operationalsubsidiaries.Upcomingregulatoryrequirementsarebeingmonitored.
• TheGroupfollowstheStreamlinedEnergyandCarbonReporting(‘SECR’)UKstandardtoreport
carbonfootprint.
• BEIS-f1(TCFDguidance:S-c)requiresscenarioanalysistobeperformedanddisclosed.TheGroup
aimstocomplyinH22024.Seefullexplanationonpage60.
Technological
Riskassociatedwith
transitioningtolower
emissiontechnology.
Low Not material ST,MT,LT
• RiskgradeislowastheGroup’splantolowertheemissionsdoesnotinvolvecomplexandexpensive
technologies.
• Thefocusremainsonincreasingtheuseofrenewableenergy,increasingenergyefficiency,reducing
fuelconsumptionandusingenvironmentallyfriendlyvehicles.Thismaypresentopportunities,such
asreducedoperatingcoststhroughefficiencygainsandlessexposuretofossilfuelpriceincreases.
Market
Riskassociatedwithchanges
tothemarketresultingfrom
climate change, such as
changing customer behaviour
anduncertainmarketsignals.
Low None LT
• RiskgradeislowastheCompany’sclientsaremicro-entrepreneurswhodealwithessentialgoods
andservices.Itishighlyunlikelytoseeanychangeincustomerbehaviourrelatedtotransitioning
to a lowcarboneconomy.
Reputational
Riskassociatedwithnotbeing
able to meet stakeholder
concerns in terms of
environmental sustainability
andcarbonemissions.
Low None ST,MT,LT
• TheGrouphasapprovedSMARTtargetsforallitssubsidiaries,includinginitiativesforreducing
emissionssuchassolarpanelinstallation,useofE-bikes,useofLEDlightsandtreeplantation.
• Subsidiarieshavemettheirtargetsfor2023.
Physical risk
Acute risk
Riskassociatedwithextreme
weatherevent’ssuchas
flooding,cyclone,heat
waves,etc.
Med Not material ST,MT,LT
• Naturalcalamitiessuchasheavyrain,floods,storms,cyclones,earthquakes,droughtsandvolcanic
eruptionswereexperiencedduringtheyear.AspertheGroup’syearlyassessment,naturalcalamities
aremostcommoninMyanmarandthePhilippines.
• SomeoperationalandfinancialimpactwasseenfromnaturalcalamitiesinMyanmar,Philippines,
Kenya,RwandaandUgandaduringtheyear.However,impactwasnotmaterial.
Chronic risk
Riskassociatedwitha
long-termshiftinclimate
pattern,suchasrisingmean
temperatures and rising
sealevel.
Low Not material LT
• Theriskisperceivedtobelowasofnow,althoughnaturalcalamitieslikedroughtsandfloodsmay
increaseoverthelong-term.Scenarioplanningtobecompletedin2024willfurtherinformthis.
• AstheGroup’sbranchesarelowcostandareonshorttermrentalagreement(2-3years),there
is an optiontorelocatefromareaspronetonaturaldisasters.
Time horizon key
ST ShortTerm(<5years)
MT MediumTerm(5-10years)
LT LongTerm(10+years)
Readmoreaboutriskonpage39
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Strategic Report
Topic
2023
target
2023
achievement
2024
target
Increase the
use of renewable
energy by installing
solar panels
150-200
panels
213 panels
200–300
panels
Reduce fuel
consumptionby
introducing electric
motorbikes
30–50
electric
bikes
32 electric
bikes
15-25
electric
bikes
AbsorbCO
2
and protectthe
environment by
plantingtrees
10–15k
trees
29.5k trees
20-30k
trees
Climate targets
ESG report continued
Management and disclosure
• Feasibilitystudyassessingopportunitiesto
reduceemissionsatsubsidiarylevelconducted.
• Disclosureofgreenhousegas(‘GHG’)emissions
accordingtoScope1and2,andtoacertain
extent (category 6 ‘business travel’ and category
7 ‘employeecommuting’)ofScope3inthe
StreamlinedEnergyandCarbonReporting
(‘SECR’)report.Category15‘Investments’have
not been disclosed due to the small nature of
clients’businessesandlackofdata.Seepage65.
• Climate related metrics are not yet included
in Remunerationpolicies.
• Internal carbon pricing mechanism not yet
consideredfortargets.
• Forward-lookingmetricshavenotbeenused.
• Emissionsourcesidentified,andreductiontargets
wereset.Subsidiariesproposeandimplement
feasiblereductioninitiatives,formingthebasis
for thedisclosed2023and2024Grouptargets.
• Based on the climate targets of all subsidiaries,
the 2024Grouptargetshavebeenapprovedby
the SustainabilityCommittee.Performancewill
be trackedandreportedquarterly.
• Exploringadoptionofmetricstomeasure
performanceandalignmentwithframeworks
suchastheScienceBasedTargetsinitiative(SBTi).
Progress Group targets 2023
• Quarterlyprogressreportsweresubmitted,
complementedbybi-annualmeetingswiththe
subsidiaryManagingDirectorstoreviewprogress.
• Alltargetsweremetwithinthedesignatedranges.
Setting Group targets 2024
• Maintaincontinuitybyadheringtosimilartargets
asthepreviousyear.
• Introduceinitiativescentredaroundknowledge
sharingandwastemanagement.While
challengingtoquantify,theseinitiativeshold
significantimpactastheyarefoundational,
involvinghighengagementwithcolleagues,
clientsandcommunities.
TheGrouphastakenitsfirststeps
towardsmitigatingemissions
bydefiningandachievingtargets.
Itsnextobjectiveistoenhance
its metrics for performance
measurementtoadvanceitsefforts
andincreasetransparency.
Metrics and targets
Topic
2023
target
2023
achievement
2024
target
Increase energy
efficiencyby
replacing regular
lightswithLED’s
2.5–4k
LEDs
8.2k LEDs
2-2.5k
LEDs
Shareknowledge
and createawareness
by training clients,
colleagues and
communities
N/A
N/A
300-400k
trainees
Improvewaste
management through
various reduce, reuse
andrecycleinitiatives
N/A
N/A
Various
initiatives
Electrifyingoperations
at ASAMyanmar
In2023,ASAMyanmarintegratedeight
electric motorbikesintoitsoperations,primarily
assigningthemtoDevelopmentOfficersand
ABMsengagingwithclients.Thebikeswere
strategically placed across several branches
to enhanceoutreachefficiency.
Theadoptionresultedinsignificantfuelsavings,
estimatedatover2,400litresannuallycompared
to fuel-basedmotorbikes.Despiteencountering
challengessuchasgovernmentrestrictionson
motorcycleuseincertainYangontownships,ASA
Myanmarinnovativelyreplacedfuelmotorbikes
withbattery-poweredonesinaffectedareas.
Thetransitionyieldedmultiplebenefits,including
reducedoperationalcosts,noisepollution
mitigation,andheightenedenvironmental
sustainability.Chargingconvenienceandlower
fuelexpensesfurtherbolsteredtheadvantages.
Staffmembersfavouredelectricmotorbikes
due totheircomfort,cost-effectiveness,and
compliancewithgovernmentregulations.ASA
Myanmarplanstoexpandelectricmotorbike
usagein2024,focusingonareaswherefuel-
basedmotorcyclesfacerestrictions.
Whileregulatoryhurdlesandmaintenancecosts
persist,theshifttowardselectric(motor)bikes
alignswiththegrowingdemandinMyanmar,
fuelled by governmental mandates and
environmentalconsciousness.
Readaboutourtreeplantingprojecton
pages 21and22
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Compliance statement
InmeetingtherequirementsofListingRule9.8.6R(8),wehaveconcludedthat
• TheGroupcomplieswithTCFDRecommendedDisclosures:Governanceaandb;Riska,bandc;andMetricsandtargetsaandb.
• TheGrouppartiallycomplieswithTCFDRecommendedDisclosures:StrategyaandbandMetricsandtargetsc.
• TheGroupdoesnotcomplywithTCFDRecommendedDisclosures:Strategyc.
Inassessingcompliance,thedocumentsreferredtointheguidancenotestotheListingRuleweretakenintoconsideration.Inthetablebelow,cross-referencesareaddedtowherethedisclosuresarelocatedorareasonis
provided for non-compliancewithanexpectedtimeframetoachievecompliance.CompliancewiththeCompaniesAct2006,s414CB(2a)-(2h),isdemonstratedinthecolumntotheright.
TCFD elements TCFD recommended disclosures Cross-reference or reason for non-compliance Next steps and other comments CA 414CB1
Governance
a. Board oversight
b. Management’srole
• See‘BoardOversight’onpage59.
• See‘Roleofmanagement’onpage59.
• CAs414CB(a)
Strategy
a. Climate-related risks and
opportunities
b. Impactontheorganisation’s
business,strategyandfinancial
planning
c. Resilienceoftheorganisation’s
strategy
• See‘Identifyingrisks’onpage60.
• SeeImpactofCRRO’sontheorganisation’s
businesses,strategyandfinancialplanning
on page60.
• Focushasbeenonsettingupgovernance,
riskmanagementandtargetsonpages59to62.
• Identifymediumandlong-termrisks.
• Scenarioanalysiswillprovidebaselinefor
financialplanning.
• Scenarioanalysishasbeenstartedandwillbe
completedinH22024.Seefurtherexplanation
on page60.
• CAs414CB(d)
• CAs414CB(e)
• CAs414CB(f)
Risk management
a. Riskidentificationand
assessment processes
b. Risk management process
c. Integrationintooverallrisk
management
• See‘Identifyingrisks’onpage60.
• See‘ManagingCRROs’onpage60.
• See‘Integratingclimaterisksintooverall
riskmanagement’onpage60.
• CAs414CB(b)
• CAs414CB(c)
Metricsandtargets
a. Climate-related metrics in line
withstrategyandrisk
management process
b. Scope1,2and3greenhousegas
(‘GHG’) metrics and the
related risks
c. Climate-related targets and
performance against targets
• See‘Managementanddisclosure’onpage 62.
• See‘StreamlinedEnergyCarbonReporting’
on page64and65.
• See‘Climatetargets’onpage62.
• The Group currently measures category six and
sevenofScope3emissions.TheGroupdoesnot
measurecategory15(Investments/financed
emissions) due to the small-scale nature of its
clients’businessesandalackofavailabledata.
The Groupistakingstepstodiscloseadditional
categorieswithinscope3for2024.
• TheGroupwillbetakingstepsinthefutureto
havecloseralignmentwithuniversalstandards,
suchastheScienceBasedTargetInitiative.
• CAs414CB(h)
• CAs414CB(g)
1 CompaniesAct2006,s414CB(2a)-(2h).
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2023 Streamlined Energy and
Carbon Reporting (‘SECR’)
In2023,theGroupcontinued
to collectdataonenergyuse
and businesstravelforoperations
covering15countries,including
13,432.1full-timeemployees
(‘FTEs’)and2,018offices.2
The tableincludestheGroup’s
energy use and associated carbon
emissions in 2022 and 2023,
brokendownbyScopes1,2and3.
The Group is required to report annual global
GHG emissionsinlinewiththeUKgovernment’s
StreamlinedEnergyandCarbonReporting(‘SECR’)
guideline,implementedbytheCompanies(Directors’
Report) and Limited Liability Partnerships (Energy
andCarbonReport)Regulations2018.These
regulationscameintoforceon1April2019and
requireorganisationstopubliclyreportoncarbon
emissionsandenergyuse.
TheGroup’semissionscalculationsandreporting
followtheGreenhouseGasProtocolCorporate
Standard(operationalcontrolapproach)covering
its energyusagein2023.
In2023,theGroupcontinuedtocollectdata
on energyuseandbusinesstravelforoperations
covering15regions,including13,432full-time
employees (‘FTEs’) (as per group HR data, excluding
onestaffofMUoffice)and2,018offices(including
the Company’s headquarters in the Netherlands
and Bangladesh).ThetableincludestheGroup’s
energy use and associated carbon emissions in
2023, brokendownbyScopes1,2and3.
1 ExcludingonestaffmemberfromtheASAIHoldingoffice
in Mauritiusbecauseofnegligibleimpact.
2 IncludingtheheadofficesandtheCompany’sheadquarters
in the NetherlandsandBangladesh.
Energyefficiencyactions
Actions taken in 2023 Planned action in 2024
Continuedtomonitorandmaintainofficebuildings
(bothleasedandowned)toensureenergyefficient
operation.Thisincludesannualmaintenanceand
cleaningofairconditioningsystems,andchecking
for misuseofwater,electricityandofficevehicles.
Suchmaintenancealsokeepsfirehazardsatbay.
Actiontocontinue.
Subsidiariesaredigitizingprocessesandprintingless. Continuetominimisetheuseofpaperinalloffices
withtheaimofachievingzeroprintinginthefuture.
Travel policy approved requiring all air travel to be
recorded and approved through formal procedures to
confirmnecessity.Sustainabilityisconsideredwhen
reviewingtraveloptions.Theuseofpublictransport
continuestobeencouraged.
Airtraveldatawillberecordedandreported
on a regularbasis.
Alloperatingcountrieshavesuccessfullymettheir
2023climatetargetsforthephasedinstallation
of solarpanels,plantingoftrees,introductionof
electricmotorcyclesandinstallationofLEDlights.
Climatetargetshavebeensetfor2024,withanew
focusonknowledgesharingandwastemanagement,
amongotherareas.Readmoreaboutsettingand
achievingtargetsonpage62.
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2023 Streamlined Energy and Carbon Reporting (‘SECR’) continued
Methodology and scope
The Group is responsible for the internal
managementcontrolsgoverningthedatacollection
process,dataaggregation,anyestimationsand
extrapolationsapplied(asrequired),theGHG
calculationsperformedandtheemissions
statements.
GHGemissionswerecalculatedaccordingtothe
GreenhouseGasProtocolCorporateAccounting
and ReportingStandard.
Scope and subject matter
Theboundaryofreportingincludesalloperating
subsidiariesandfacilitiesowned,leasedoractively
managedbytheGroup,aswellasbusinesstravel
in Company-ownedvehiclesoremployee-owned
or hiredvehicleswheretheCompanyisresponsible
forpurchasingthefuel.Thisalsoincludesairtravel.
Energy and GHG sources included in the process
• Scope 1:Directemissionsfromsourcesthatare
ownedorcontrolledbythecompany,suchas
emissionsfromcompany-ownedvehicles,
facilities,andequipment.
• Scope 2:Indirectemissionsfromtheconsumption
of purchased electricity, heat, or steam by the
company.Theseemissionsoccurasaresultof
the company’sactivitiesbutaregeneratedby
a thirdparty.
• Scope 3: Indirect emissions that occur as a result
ofthecompany’sactivitiesbutarenotdirectly
ownedorcontrolledbythecompany.This
includes emissions from sources such as business
travel,employeecommuting,supplychain
activities,andproductuse.
Wasteandfugitiveemissionsfromrefrigeration
(e.g. airconditioning)isomittedfromthereport
due tolackofdata.ASAInternationalGroupplcis
workingwithbuildingmanagerstodevelopamore
completedatasetinthisarea.
The Company has excluded all categories from
Scope 3exceptfor6and7duetodatalimitations.
Category15,“investments”(financedemissions),
has beenexcludedduetotherelativelysmallsizeof
clientbusinesses.However,theCompanywillexplore
conductingananalysistoassessiftheseemissions
exceedthematerialitythreshold(>40%).
TypesofGHGsincluded,asapplicable:CO
2
, N
2
O,
CH
4
, HFCs, PFCs, SF
6
and NF
3
.
ThefigureswerecalculatedusingUKgovernment
2023 conversion factors, expressed as tonnes
of carbondioxideequivalent(tCO
2
e).
The company does not disclose emissions for the UK
oroffshoreareasasitdoesnothaveanyoperations
inthoseregions.
Particulars 2023 2022
Energy consumption used (kWh)
Electricity(kWh) 3,864,000 3,569,221
Gas(kWh) 1,216,605 1,668,700
Transportfuel(kWh) 45,605,160 41,017,650
Otherenergysources(kWh) 2,016,146 2,140,388
Total (kWh) 52,701,911 48,395,959
Emissions (tCO2e)
Scope 1
Emissionsfromcombustionofgas(tCO
2
e) 247 341
Emissionsfromcombustionoffuelfortransportpurposes(tCO
2
e) 4,818 4,923
Emissionsfromcombustionoffuelforgenerators(tCO
2
e) 469 498
Scope 21
Emissionsfrompurchasedelectricity(tCO
2
e) 747 690
Scope 3
Category7:Employeecommuting2(tCO
2
e) 1,687 555
Category6:Businesstravel3(tCO
2
e) 606 385
Total location based tCO2e 8,574 7,392
Intensity ratio
Numberoffull-timeemployees(‘FTE‘)withinfinancialyear 13,4324 13,601
Intensityratio:tCO
2
efromScope1,2and3/FTElocationbased 0.64 0.54
1 Location-basedmethodapplied
2 Includes travel in rental cars and public transport
3 Includesflightdata
4 OnestaffofMauritiusofficeisexcluded.
Verification
InternallybytheCompany.
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Non-financial and
sustainability
information
statement
ESG Our policies and practices Description Page reference
Exclusion list
TheGroup’sexclusionlistisdesignedtopreventfinancingofbusinessesthatexcessively
exploitorharmbiodiversityortheenvironment.Whereappropriate,theseexclusionsalign
withinternationalconventions.
Read more on page 57
See policies and
practicesonourwebsite
Environment and Social
Management System
(‘ESMS’)
TheCompany’sESMSoutlinesenvironmentalandsocialmanagementplans,policiesand
procedures,includingimplementationproceduresandresponsibilities.Itsgoalistoprevent
orminimisenegativeenvironmentalandsocialimpactsandpromotegoodgovernance
practices.Thesystemalignswithindustrystandards,suchasIFCstandard1and2,SMART
Campaign,andUniversalStandardsforSocialPerformanceManagement.
Read more on page 57
Environmental policy
TheCompany’senvironmentalpolicyoutlinestheactionsthatitsstaffmusttaketominimise
andpreventanyharmfulimpactsontheenvironment.
Read more on page 57
Travel policy
TheCompany’stravelpolicypromotesresponsibleandsustainabletravelpractices,witha
particularfocusonairtravel.Itoutlinesthenecessaryfactorstoconsiderandstepstotake
beforeundertakingairtravelforbusinesspurposes.
Read more on page 57
Natural Calamity
Impact Assessment
(‘NCIA’)
TheGroupassessestheimpactofnaturaldisasters,suchasfloodsandearthquakes,onits
resourcesandoveralloperations.ThisanalysisprovidesvaluableinsightsintotheCompany’s
susceptibilitytosuchcalamities,identifyingareasthatmayrequireadaptationtomitigaterisks.
Read more on page 57
Emergency
Preparedness
and Response Plan
(‘EPRP’)
TheobjectiveoftheEPRPistoprotectresources,clientsandstaff,tosafeguardcritical
information,andtoguaranteethecontinuedavailabilityofessentialoperationsandservices.
ItoutlinesstrategiesandplansfortheCompany’semergencymanagementandresponse.
By havinganEPRPinplace,theCompanycaneffectivelyprepareforandmitigatethe
impactsofemergencysituations.
Read more on page 57
Client Protection
Principles (‘CPP’)
TheCCP,developedbySMARTCampaign,isaleadingindustrybodyinthefinancialinclusion
industrywhichconsidersclientprotectioninallaspectsofthebusiness.CPPdescribesthe
minimumprotectionthatmicrofinanceclientsshouldexpectfromtheirproviders,andalso
theprotectionthataninstitutionshouldmaintaintoservethebestinterestsofitsclients.
Readmoreonpage51
Client Complaint
Resolution Committee
(‘CCRC’)
Through the CCRC clients can provide direct feedback on services or lodge complaints
about inappropriatebehaviourortreatmentbyanyoftheGroup’sstaff.Everyquartera
reportissharedwithseniormanagementbytheCCRCwiththenatureofcomplaintsand
actionstaken.
Readmoreonpage51
Grievance Mitigation
Committee (‘GMC’)
TheGrouphasestablishedaneffectivegrievancemechanismforallemployees,allowing
themtoraiseanywork-relatedconcernsorcomplaintswithoutfearofreprisal.
Read more on page 52
Health and Safety
The Group monitors and controls health and safety risks, regularly provides safety and
awarenesstrainingtoemployees,takespreventivemeasuresandemergencyorcorrective
actionsonworkplaceincidentsorillness,andmaintainssafeequipmentandinfrastructures
attheworkplaces.Eachoperatingsubsidiaryhasformedahealthandsafetycommitteeand
anintegratedoccupationalHealthandSafetychecklistwithriskcategoriestoensureregular
supervisionandmonitoringthroughouttheCompany.
Read more on page 53
Diversity, Equity and
Inclusion (‘DEI’) Policy
TheDEIpolicyensuresthatDEIiscentraltointernalpracticesandpolicies.Itprovides
directionandstructureforimplementingandmonitoringDEIinitiatives,fosteringadiverse
workforcewhereeveryonecanthrive,regardlessofbackgroundorcharacteristics.
Read more on page 53
As a socially responsible lender,
theGrouphasawiderangeof
policiesandpracticestoensure
thattheCompanyanditsstaff
complywithenvironmental,social
and legal requirements, including
respectinghumanrights,and
adhere to the highest professional
and ethical standards in dealing
withclients,suppliers,communities
andeachother.Thisstatement
providesanoverviewoftopics
and relatedreportingreferences
as requiredbysections414CAand
414CBoftheCompaniesAct2006.
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ESG report continued
Non-financial and sustainability information statement continued
ESG Our policies and practices Description Page reference
Whistleblowing
Employeesarestronglyencouragedtospeakupaboutanyactionsthatmightviolatelaws,
regulations,orCompanypolicies.Theycandosobyusingadesignatedcomplaintboxor
reachingoutdirectlytothelocalChairmanoftheAuditandRiskCommittee,aswellasatthe
Grouplevel.Examplesofsuchactionsencompassimproperorunethicalbusinesspractices,
concernsrelatedtohealth,safety,andtheenvironment,orbreachesoftheCodeofConduct.
Read more on pages 52
and81
See policies and
practicesonourwebsite
Child Labour and
Protection
TheGroupisdedicatedtosafeguardingchildrendirectlyorindirectlyaffectedbyits
operations.Itimplementsstrictpoliciestopreventchildlabour,collaboratesoneducation
andwelfareinitiatives,andpromptlyaddressesanyidentifiedcases,ensuringchildren’srights
andwell-beingareprotected.
See Policies and
practicesonourwebsite
Sexual Harassment
Elimination
TheCompanypromotesasafeworkenvironmentandhaveazero-tolerancepolicytowards
harassmentofanykind,particularlysexualharassment.
Readmoreonpage81
See Policies and
practicesonourwebsite
Non-Discrimination
Unfairdiscriminationinanyformisunacceptable.Managementandemployeesmustensure
a fairandsympatheticworkenvironmentforall,regardlessofmaritalstatus,religion,
disability,sexuality,gender,race,orethnicity.Thispolicyofequalopportunitiesanddiversity
extendstorecruitment,remuneration,training,development,promotion,discipline,andall
aspectsofemployment,includingvolunteers,interns,clients,suppliers,andotherswith
whomASAInternationaloritsemployeesengage.
Read more on page 86
See Policies and
practicesonourwebsite
Code of Conduct
TheGroup’sCodeofConductandEthicsisdesignedtobeethical,dignified,transparent,
equitableandcost-effective,andexpressesthecorevaluesofmicrofinancepractice.
See policies and
practicesonourwebsite
Anti-Bribery and
Anti-Corruption
This policy is to combat improper payments or inducements and provide basic guidance
to all employees,wherevertheyarelocated.TheGroupadoptsazero-toleranceapproach
to briberyandcorruption,ensuringcompliancewithallapplicableanti-briberyandanti-
corruptionlawsandregulations,includingtheUKBriberyAct2010.
Readmoreonpage81
See policies and
practicesonourwebsite
Anti-Money Laundering
TheCompanyanditssubsidiariesarefirmlycommittedtopreventingmoneylaunderingand
anyactivitythatfacilitatesitorsupportsterroristorcriminalendeavoursintheiroperations
Read more on page 42
See Policies and
practicesonourwebsite
Readtheremainingreportingrequirements
on thebusinessmodelonpage12,theprincipal
risksonpages39to47, diversity and gender
on page53and86andclimate-relatedfinancial
disclosures on pages 58 to 63
Findthedescriptionofthetoolsandindicators
in theESGreportonpages51to53and57and
theAlternativePerformanceMeasures(‘APM’)
tableonpage172
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It is pleasing to note that our performance
improved as the year went on, allowing
us to be more confident about 2024
and beyond.”
Chairman’s introduction
Corporate
governance
report
I am pleased to present
our Board Report for 2023.
The year again presented numerous business
challenges, in particular the ongoing impact of
high inflation and currency devaluation in many
of our markets. In addition we transitioned to new
leadership in the middle of the year. It is pleasing
therefore to note that our performance improved
as the year went on, allowing us to be more
confident about 2024 and beyond. That confidence
is underpinned by progress we are now reporting
in our digital transformation strategy.
The Board worked harder than ever throughout
the year to ensure that the architecture is in
place for the achievement of our goals – namely
sustainable growth via unwavering belief in the ASA
vision of financial inclusion.
The Board is scheduled to meet five times a year at
regular intervals. This year, the Board met formally on
six occasions with additional informal meetings, given
the importance of the business and management
issues to be discussed. In addition, regular meetings
continued of the various specialist Committees,
namely the Audit and Risk Committee, Nomination
Committee, Remuneration Committee, Independent
Directors’ Committee and Sustainability Committee.
I have been impressed with the willingness of all
Directors to devote whatever time and focus is required
to ensure the success of this unique company.
The Board itself saw significant changes during the
year. At the Annual General Meeting on 15th June
2023, our co-founder Dirk Brouwer stepped into his
new role as Deputy Chair and Special Adviser; Karin
Kersten became Chief Executive; Aminur Rashid
retired after many years of dedicated service to the
Group; and Gavin Laws retired as a non-executive
director, with Chris Low transitioning seamlessly into
his role as Chair of the Audit and Risk Committee.
With our new Board and leadership structure in
place and functioning well, we can look to 2024
and beyond with renewed confidence. I would like
to extend my sincere thanks to the Board and
management team for their continued hard work and
commitment towards our shared goals of sustainable
growth and financial inclusion. My particular thanks
are also due to all our employees across our thirteen
operating countries and our head offices for their
tremendous dedication to our mission.
Guy Dawson
Chairman,
ASA International Group plc
26 April 2024
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Strategic Report
Board of Directors
The Board of ASA International combines leadership in microfinance
with strong finance and banking experience. The Directors possess
both solid industry experience as well as multiple years of experience
in senior executive roles in international finance and banking.
Guy Dawson
Non-Executive
Chairman
Appointed: 28 June 2018
1
N
ID
Dirk Brouwer
Non-Executive
Deputy Chairman
Appointed: 15 May 2018
1
Karin Kersten
Chief Executive Officer
Appointed: 25 April 2022
Hanny Kemna
Senior Independent
Non-Executive Director
Appointed: 28 June 2018
1
A/R
N
R
ID
Dr Salehuddin Ahmed
Independent
Non-Executive Director
Appointed: 07 December
20201
A/R
N
R
ID
Chris Low
Independent
Non-Executive Director
Appointed: 01 February 2023
A/R
R
ID
Mr Dawson became a Non-Executive Director of ASA
International Holding (‘ASA International’) in 2013 and
became a Director of the Company on 28 June 2018. He
was appointed Chairman of the Board on 1 January 2021.
Mr Dawson continues to chair the Nomination Committee
and the Independent Directors’ Committee. He is currently
a Non-Executive Director of Egerton Capital and
Citywire Holdings.
Mr Brouwer co-founded ASA International in
2007 and has served as its Executive Director and
Chief Executive Officer till June 15, 2023. With over
20 years of experience in investment banking, and 15 in
microfinance, he is also the Managing Director of Catalyst
Microfinance Investors (‘CMI’), which he co-founded in
2006. He is also Non-Executive Director of CarbonX.
Ms Kersten joined the management of the Group as
Corporate Development Director on 1 October 2021 and
has been the Chief Executive Officer since June 15, 2023.
Prior to this she worked for ABN AMRO Bank where she
had a distinguished career, serving inter alia as Managing
Director, Trade & Commodity Finance, Managing Director
Transaction Banking, and Managing Director Strategic
Risk Management Ms Kersten is also a Member of the
Supervisory Board of Mondriaan Fonds and Chairman of
the Audit Committee of Mondriaan Fonds. She is a member
of the Selection Committee of Hotelschool, The Hague.
1 Guy Dawson was appointed to the Board in June 2018 and as Chairman on 1 January 2021. Hanny Kemna was appointed to the Board in June 2018 and as Senior Independent Director on 1 January 2021.
Dirk Brouwer was appointed to the Board in May 2018 and as Deputy Chairman in June 2023.
Ms Kemna has been a Non-Executive Director since
June 2018 and was appointed as Senior Independent
Director on 1 January 2021. She is the Chair of the Board
of Directors for Dutch pension provider and asset manager
MN. Ms Kemna is also the Chair of the Audit Committee
at insurer Vivat – Athora NL, at healthcare insurer Menzis
and at the National ICT Institute for Healthcare in the
Netherlands, and is on the supervisory board of ZGT in
the Netherlands. Since 2020, she has served as a deputy
member of the Board of the Dutch Court of Auditors.
Ms Kemna has a broad experience in working with
international financial and government institutions.
Dr Ahmed has been a Non-Executive Director since
December 2020. He is currently a Professor at the
Graduate School of Management at BRAC University
and an Independent Director of Grameenphone
Ltd. He is also on the advisory bodies of several
governmental and non-governmental agencies in
Bangladesh and a member of the board of trustees
of three universities and a postgraduate institute.
He has worked as a Consultant for many international
agencies and has authored over 90 publications.
Mr Low has been a Non-Executive Director since February
2023. Previously, Mr Low was I&M Group Plc’s Regional
Director for its East Africa businesses. He advises several
FinTech start-ups and sits on the Boards of United Bank
for Africa (UK) Ltd, EdPartners Africa Holdings Ltd, the
Scottish African Business Association, and is a member of
the Investment Committee of Zephyr Acorn Venture Fund,
an investor in early-stage impact companies. With over 30
years in international financial services, risk management and
digital transformation, Mr Low has specialised in emerging
markets, working across Africa, Asia and the Middle East.
Committee membership key
Audit and Risk
Remuneration
Nomination
Independent
Directors
A/R
R
N
ID
  Female – 2
  Male – 4
Board by gender
  50-60 – 1
  60-70 – 3
  >70 – 2
Board by age
  Executive members – 1
  Non-Executive members – 5
Balance of the Board
 <2 years – 2
  2-5 years – 4
Board by tenure
Our Board
Full biographies are available on our website Full biographies are available on our website
See our diversity listing rule table in our
Nominations Committee Report on page 86
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Executive Committee
The Group’s senior management have significant experience in financial
services, including the microfinance industry (‘MFI’).
Joint corporate headquarters in Dhaka and Amsterdam
Full biographies are available on our website
Karin Kersten
Chief Executive Officer
Joined: 2021
Years of financial services
experience: 25
Azim Hossain
Chief of Operations
Joined: 2007
Years of financial services
experience: 35
Tanwir Rahman
Chief Financial Officer
Joined: 2017
Years of financial services
experience: 16
Rob Keijsers
Chief Digital and
Information Officer
Joined: 2022
Years of financial services
experience: 17
Martijn Bollen
Chief Compliance, Legal
and Risk Officer
Joined: 2007
Years of financial services
experience: 20
Sazzad Hossain
Head of HR,
Communications and
Sustainability
Joined; 2018
Years of financial services
experience: 15
Ezazul Islam
Head of Internal Audit
Joined; 2024
Years of financial services
experience: 10
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Country Heads
The Group’s senior management have significant experience in
financial services, including the microfinance industry (‘MFI’).
Country Heads
South Asia West Africa East AfricaSouth East Asia
India
Anjan Dasgupta
Years of financial
services experience: 37
Nigeria
Andrew Amedue
Years of financial
services experience: 23
Rwanda
Jamilur Rahman Chowdhury
Years of financial
services experience: 32
The Philippines
T. I. M. Fakruzzaman
Years of financial
services experience: 32
Kenya
Ashan Habib
Years of financial
services experience: 18
Pakistan
Saeed Uddin Khan
Years of financial
services experience: 42
Ghana
Md. Aourongjeb
Years of financial
services experience: 18
Myanmar
Md. Muzammel Haque
Years of financial
services experience: 19
Tanzania
Muhammad Shah Newaj
Years of financial
services experience: 15
Zambia
A.B.M. Asaduzzaman
Years of financial
services experience: 33
Sierra Leone
Shariful Islam Khan
Years of financial
services experience: 15
Sri Lanka
G.K.K Gamage
Years of financial
services experience: 36
Uganda
Khalilur Rahman
Years of financial
services experience: 30
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Board activities
Board key activities during the year
• Approved the CEO succession plan on
23 February 2023 pursuant to which Mr Brouwer
remained CEO until the 2023 AGM, at which
point Ms Kersten was appointed CEO.
• Approved the change in remuneration of
Mr Brouwer and Ms Kersten on recommendation
of the Remuneration Committee post-
appointment of Ms Kersten as CEO and
Mr Brouwer as Deputy Chair and Special Advisor.
• Approved the new governance structure and
restructuring of the Executive Committee (‘ExCo’)
which consists of the holders of the following key
roles: Chief Executive Officer, Chief Financial
Officer, Chief of Operations, Chief Digital and
Information Officer, Chief Compliance, Legal and
Risk Officer, Head of HR, Communications and
Sustainability. The Head of Internal Audit is not
a member of the ExCo but attends its meetings.
• Regularly reviewed operating, financial and
Committee reports from the Executive Directors,
CFO and Committee Chairpersons.
• Discussed the Company’s strategy in face of the
changing economic and financial environment
including the update on Growth and Strategy Plan.
• Focused on operational efficiency and cost
savings, particularly monitoring developments
in India, reducing disbursement and increasing
collections, recovering outstanding debts,
streamlining the business, and provisioning for the
Indian portfolio; also considered strategy to shrink
business while meeting obligations.
• Reviewed and approved the budget for 2024 and
the forecast up to 2028.
• Evaluated various scenarios for the business
in India following the impact of Covid on the
portfolio as well as the situation in Myanmar.
• Reviewed and approved the announcements for
the lower profit estimates in July and the trading
and business updates in May and September.
Reviewed regular business and trading
throughout the year.
• Discussed the share price developments and any
additional actions to be taken.
• Continuously monitored the liquidity position
of the Company. Reviewed and approved funding
terms for new loan facilities.
• Appointed Stifel as its broker as well as Cavendish
to produce paid research.
• The Board discussed progress on the digitalisation
project, including implementing the new Core
Bank System (‘CBS’) and introducing Digital
Financial Services (‘DFS’). They decided Ghana
would pilot DFS alongside CBS, with Pakistan
launching the CBS first (Temenos Transact)
and ASA India transferring AMBS to local
microfinance banking software (Craft Silicon).
Updates on DFS and app development, CBS
implementation progress, and the DFS Readiness
Indicator were reviewed.
• Approved the Group culture statement and
focused on the engagement with shareholders
and the workforce.
• Reviewed thematic audit on fraud risk and
ensured mitigant actions to enhance controls
were followed through.
• Discussed progress on diversity and sustainability
targets, as well as community projects.
• Approved the stakeholder engagement programme
for Board members and appointed the Chair as the
designate to engage with the workforce.
• In preparation for the Annual General meeting
(‘AGM’) and the resolutions proposed, approved
the submission to the Takeover Panel pursuant to
requesting a waiver of a member of the Concert
Party to make a mandatory offer for the remainder
of the share capital of the Company under Rule 9 of
the Takeover Code as a result of any buyback by the
Company or as a result of the exercise of rights to
shares under the Long Term Incentive Plan (‘LTIP‘)
(by the Dirk Brouwer being a Concert Party).1
Changes to the Board
Chris Low joined the Board with effect from 1 February
2023. Gavin Laws retired at the 2023 AGM on 15 June
and Aminur Rashid retired with effect from 1 July 2023.
See details on the appointment dates on page 69.
The Guidance on Board Effectiveness published in
association with the Code (which applies to companies
listed on the London Stock Exchange) recommends that
a chairman or a Non-Executive director should not stay
in post for more than nine years after joining a board.
Although Guy Dawson became a Non-Executive
Director of ASA International Holding in 2013,
he did not join the Board of the Company until its
incorporation in 2018. With this in mind, the Board
has not yet scheduled a date for his retirement and
considers that, as Chairman, Mr Dawson continues
to demonstrate objective judgement and promote
constructive challenge among other Board members.
Attendance at Board and Board Committee meetings
The attendance of Directors at scheduled meetings
of the Board and of Committees of which they
were members during the financial year is shown
in the table below. Some Directors also attended
Committee meetings by invitation during the year;
this is not reflected in the table.
Board
Audit and Risk
Committee
Remuneration
Committee
Nomination
Committee
Independent
Directors’
Committee
Attended Tot al Attended Tot al Attended Tot al Attended Tot al Attended Tot al
Executive Director
Karin Kersten 7 7
Aminur Rashid 2 2
Non-Executive
Director
Guy Dawson 7 7 4 4 2 2
Dirk Brouwer2 7 7
Gavin Laws 2 2 3 3 2 2 1 1
Chris Low 7 7 3 3 2 2 1 2
Hanny Kemna 6 7 5 6 2 4 2 4 2 2
Salehuddin Ahmed 7 7 6 6 4 4 4 4 1 2
2 Dirk Brouwer was Executive Director until 15th June 2023, after which he was appointed Non-Executive Director.
Note: ‘Totals’ are based on the period of active Board and Committee membership. For Gavin Laws, Aminur Rashid and Chris Low, this is not the
case for the full year 2023. Therefore the totals differ from other members.
1 Dirk Brouwer and the entities through which he indirectly holds his interests in the Company, including CMIMC, CMI and Continuity (each of
them being “a member of the Concert Party”), which the Company considers, following discussions with the Panel, are presumed to be acting
in concert (as defined in, and for the purposes of, the Takeover Code).
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Leadership from the Board
The Board’s primary role is to provide overall
leadership and to ensure that the Company
is appropriately managed to deliver long-term
stakeholder value.
The Board is responsible for setting the Company’s
objectives and policies, and providing the effective
leadership and control required for a public company.
It is also responsible for approving the Group
strategy, budgets, business plans and major capital
expenditure, and it monitors financial performance
and critical business issues.
The Board oversees the Group’s operations, with
the aim of ensuring that it maintains a framework
of prudent and effective controls, which enables risks
to be properly assessed and appropriately managed.
The Governance report is structured around the
key themes of the Code to provide genuine
understanding of how governance supports
and protects the Group and our stakeholders.
Board size and composition
The Board comprises: Guy Dawson (Non-Executive
Chair), Dirk Brouwer (Deputy Chair), Karin Kersten
(Chief Executive Officer), Hanny Kemna (Senior
Independent Director), and two further Non-Executive
Directors: Salehuddin Ahmed and Chris Low.
The Company is committed to ensuring that any
vacancies that may arise are filled by the best-
qualified and most suitable candidates and
recognises the value of gender and ethnic diversity in
the composition of the Board. When Board positions
become vacant as a result of retirement, resignation
or otherwise, the Board aims to ensure (through
the Nomination Committee, and using an external
search agency as appropriate) that a diverse pool
of candidates is considered. By a process of annual
review, the Board ensures that it continues to consist
of members who have the relevant knowledge, skills
and expertise to undertake their duties as Directors
in such a way as to ensure proper corporate
governance and help to generate sustainable
long-term value for stakeholders.
Biographical details of the Directors at the date
of this report are set out on page 69 together with
details of their membership of Board Committees.
Board balance and Non-Executive Directors’
independence
The UK Corporate Governance Code (‘Code’)
recommends that at least half the Board of Directors
of a UK-listed company, excluding the Chair, should
be Non-Executive Directors determined by the
Board to be independent in character and judgement
and free from relationships or circumstances which
may affect, or could appear to affect, the Directors’
judgement. The Board consists of four Non-
Executive Directors plus the Deputy Chair and
the Chief Executive Officer. The Board regards
three Non-Executive Directors (other than the
Chairperson) as ‘independent Non-Executive
Directors’ within the meaning of the Code, and
is satisfied that they are free from any business
or other relationship that could materially interfere
with the exercise of their independent judgement.
Despite the fact that Mr Dawson is technically not
considered as independent for the purpose of the
balance requirement under the Code, he performs
his role in an independent fashion. The Board
remains fully satisfied with the performance
of Mr Dawson, who in 2023 played a crucial part
in ensuring a smooth transition between CEOs.
Senior Independent Director
As recommended by the Code, the Board has
appointed one of the Non-Executive Directors
to be the Senior Independent Director to provide
a ‘sounding board’ for the Chair in matters of
governance and to serve as an intermediary for the
other Directors and for shareholders when required.
The Senior Independent Director meets the other
Non-Executive Directors once a year to appraise
the performance of the Chair, and is available to
shareholders if they have concerns which contact
through the normal channels of the CEO and the
Chair has failed to resolve or for which such contact
is inappropriate. Hanny Kemna has been the Senior
Independent Director since 1 January 2021.
The Code further recommends that Directors should
be subject to annual re-election. All the Directors
of the Company were re-elected at the AGM held
on 20 June 2023.
Compliance with the UK Corporate Governance
Code 2018 (‘the Code’)
See the Corporate Governance Statement in the
Directors’ report on page 100.
Matters reserved for the Board
The Board has responsibility, inter alia, for the
overall leadership of the Company and setting the
Company’s values and standards. Specifically,
it approves the annual operating and capital
expenditure budgets and any material changes
to them. It also oversees the operations of the
Group so as to ensure prudent management,
planning, risk management and internal control
systems, adequate accounting and other records,
and compliance with statutory and other regulatory
obligations. It periodically reviews performance in
the light of the Group’s strategic aims and business
plans and budgets, and ensures that any necessary
corrective action is taken. The Board is responsible
for approving the interim and annual financial
statements and the Annual Report, including the
dividend policy and the declaration of interim
dividends and proposing to shareholders of
final dividends.
The Board has overall responsibility for ensuring
a sound system of internal control and risk
management, including procedures for the detection
of fraud and the prevention of bribery.
The Board has delegated the day-to-day running
of the Group to the CEO and her management team,
who review and approve all of the information and
proposals that are submitted to the Board.
Directors receive a pack of briefing notes and
reports for their consideration in advance of each
Board meeting, including reports on the Company’s
operations, so as to ensure that they remain briefed
on the latest developments and are able to make fully
informed decisions. The briefing notes and reports,
and the Board’s consideration of them, take into
account the factors set out in section 172 of the
Companies Act 2006 concerning the need to have
regard to the interests of the Company’s various
stakeholders.
All Directors have access to the advice and services
of the Company Secretary, who is responsible for
ensuring that Board procedures are followed and that
applicable rules and regulations are complied with.
All Directors may take independent professional
advice at the expense of the Company in the
furtherance of their duties, if they judge it necessary.
On appointment, all Directors are advised of their
duties, responsibilities and liabilities as a Director
of a public listed company. Directors have the right
to request that any concerns they have are recorded
in the appropriate Committee or Board minutes.
Relationship Agreement
The Company has entered into a relationship
agreement (the ‘Relationship Agreement’) with
its founders (the ‘Controlling Shareholder Group’),
the principal purpose of which is to ensure that the
Company will be able, at all times, to carry out its
business independently of the members of the
Controlling Shareholder Group and their respective
associates. The Relationship Agreement contains
undertakings from each of the members of the
Controlling Shareholder Group that (i) transactions
and relationships with it and its associates will be
conducted at arm’s length and on normal commercial
terms, (ii) neither it nor any of its associates will take
any action that would have the effect of preventing
the Company from complying with its obligations
under the Listing Rules, and (iii) neither it nor any of
its associates will propose or procure the proposal of
a shareholder resolution which is intended or appears
to be intended to circumvent the proper application
of the Listing Rules. The Company is in compliance
with the undertakings in the Listing Rules and the
Relationship Agreement and so far as the Company is
aware, the undertakings have been complied with by
each member of the Controlling Shareholder Group.
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Leadership from the Board continued
In accordance with the terms of the Relationship
Agreement, for so long as Catalyst Microfinance
Investors (‘CMI’) (currently holding 29.2%) and
Catalyst Continuity (currently holding 17,1%)
together retain (i) an aggregate interest of greater
than or equal to 25% in the issued ordinary share
capital of the Company, they shall together be
entitled to appoint two Non-Executive Directors to
the Board (but at present have not done so), and (ii)
an aggregate interest of less than 25% but greater
than or equal to 10% in the issued ordinary share
capital of the Company, they shall together be
entitled to appoint one Non-Executive Director
to the Board. In addition, for so long as CMI and
Catalyst Continuity together retain an interest of
10% or more in the issued ordinary share capital of
the Company, they shall be entitled to appoint one
Non-Executive Director to each of the Company’s
Nomination Committee and Remuneration
Committee.
CMI and Catalyst Continuity previously undertook
that, for as long as Dirk Brouwer remained as CEO
and Md Shafiqual Haque Choudhury remained
on the Board as the appointee of the Controlling
Shareholder Group and as Chair of the Company,
they would not exercise the right to appoint an
additional Non-Executive Director to the Board
or to appoint a Non-Executive Director to the
Remuneration or Nomination Committees. Following
the resignation of Mr Choudhury at the end of 2020,
CMI and Catalyst Continuity were no longer bound
by that undertaking. Further, since Mr Brouwer
resigned as CEO with effect from the 2023 AGM,
this undertaking is no longer binding.
The Relationship Agreement will terminate if the
ordinary shares cease to be listed on the premium
listing segment of the Official List and traded
on the London Stock Exchange or the Controlling
Shareholder Group together ceases to retain an
interest of 10% or more of the issued ordinary share
capital of the Company (or an interest which carries
10% or more of the aggregate voting rights in the
Company from time to time).
Management succession
The Board approved the following succession plan
at its meeting held on 23 February 2023: Mr Brouwer
remained as CEO until the 2023 AGM held on
15 June, at which point Ms Kersten, was appointed
CEO. Mr Brouwer stepped into the new role as
(i) Deputy Chair of the Board of ASA International
and (ii) Special Adviser to the new CEO, the Executive
Committee and the broader management team
in order to (a) smooth the path of transition and
(b) support the new leadership going forward.
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Governance framework
The Board has established a number of Committees,
to which responsibility for certain matters has been
delegated. The Board Committee structure is shown
in the diagram above. Each Committee has written
terms of reference setting out its roles and
responsibilities, and the extent of the authority
delegated by the Board. The terms of reference
are available on the Company’s website. The Chair
of each Committee reports regularly to the Board
on matters discussed at Committee meetings.
The Board Committees
The Board has established the three Committees
envisaged by the Code: an Audit and Risk Committee,
a Nomination Committee and a Remuneration
Committee. The Board has also established a
Disclosure Committee and an Independent Directors’
Committee. If the need should arise, the Board may
set up additional Committees as appropriate. Reports
on the Committees’ activities in 2023 appear later
in this report.
Remuneration Committee
The Remuneration Committee assists the Board in
fulfilling its responsibilities in relation to remuneration.
This includes making recommendations to the Board
on the Company’s policy on executive remuneration,
including setting the overarching principles,
parameters and governance framework of the
Group’s Remuneration Policy and determining the
individual remuneration and benefits package of
each of the Company’s Executive Directors and its
Company Secretary. The Remuneration Committee
will also ensure compliance with the Code in relation
to remuneration.
During 2023, the Remuneration Committee
was chaired by Salehuddin Ahmed, and its other
members were Chris Low and Hanny Kemna. The
Remuneration Committee normally meets at least
three times a year, and met four times in 2023.
Audit and Risk Committee
The Audit and Risk Committee has responsibility for,
amongst other things, monitoring the integrity of the
financial statements of the Company, reviewing the
Company’s internal financial controls and monitoring
and reviewing the effectiveness of the Company’s
Internal Audit function and external audit process.
The Audit and Risk Committee is chaired by Chris
Low, and its other members during 2023 were Hanny
Kemna and Salehuddin Ahmed. The Audit and Risk
Committee meets at least four times a year, and
met six times in 2023.
Nomination Committee
The Nomination Committee assists the Board in
determining the composition and make-up of the
Board. It is responsible for periodically evaluating
the balance of skills, experience, independence and
knowledge on the Board. It leads the process for
Board appointments and makes recommendations
to the Board, taking into account the challenges
and opportunities facing the Group in the future.
The Nomination Committee is chaired by Guy
Dawson, and its other members during 2023 were
Hanny Kemna and Salehuddin Ahmed.
The Nomination Committee meets at least twice
a year, and met four times in 2023.
Independent Directors’ Committee
The Independent Directors’ Committee identifies
and manages matters involving conflicts of interest
(including potential conflicts of interest) between any
Group company, on the one hand, and any controlling
shareholder or related party (each as defined under
the Listing Rules), on the other hand. It is also
responsible for overseeing and scrutinising the
relationship between the Group, its related parties
and its controlling shareholders (including evaluating,
monitoring and approving any material transactions
or arrangements between such parties and generally
monitoring compliance with the Relationship
Agreement (see page 161).
The Independent Directors’ Committee comprises all
of the Independent Non-Executive Directors, being
Salehuddin Ahmed, Guy Dawson, Hanny Kemna and
Chris Low. It was chaired by Guy Dawson in 2023
and met four times.
Disclosure Committee
The Disclosure Committee is chaired by the CEO
and also includes the CFO and the Chief Compliance,
Legal and Risk Officer. It meets as required in order
to assist the decisions of the Board concerning the
identification of inside information and to make
recommendations about how and when that
information should be disclosed in accordance
with the Company’s disclosure procedures manual.
Its primary duty is to ensure that inside information
is properly disclosed in accordance with the
requirements of the Market Abuse Regulation.
Reports for each of the Board’s Committees are set
out later in this report, and provide further detail on
their role and responsibilities, as well as the activities
they have undertaken during the year.
Meetings of the Board
At each scheduled meeting, the Board receives
reports from the CEO, Chief of Operations and the
CFO on the performance and results of the Group.
In addition, the Chief Digital and Information Officer
and the CFO attend each meeting to update the
Board on performance, strategic developments
and initiatives in their respective areas, and the
Chief Compliance, Legal and Risk Officer provides
updates on compliance, legal and regulatory matters.
In addition, the Board receives regular updates from
the Head of Treasury and Risk Management, and the
Head of Group Internal Audit on risk, compliance
and internal audit.
Operational updates are provided by the Chief
of Operations, and updates related to IT systems
of the Company are provided by the Chief Digital
and Information Officer.
An annual schedule of rolling agenda items ensures
that all matters are given due consideration and are
reviewed at the appropriate point in the financial and
regulatory cycles. Meetings are structured to ensure
that there is sufficient time for consideration and
debate of all matters. In addition to scheduled or
routine items, the Board also considers key issues
that impact the Group, as they arise.
The Board
Remuneration
Committee
Audit and Risk
Committee
Nomination
Committee
Independent
Directors’
Committee
Disclosure
Committee
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Governance framework continued
The Directors receive detailed papers in advance
of each Board meeting. The Board and Board
Committee agendas are carefully structured by the
CEO, General Counsel and the Company Secretary
for the Chair’s approval. Each Director may review
the agenda and propose items for discussion with
the Chair’s agreement. Additional information is also
circulated to Directors between meetings, including
relevant updates on business and regulatory
announcements. The annual schedule of Board
meetings is decided a substantial amount of time
in advance in order to ensure, so far as possible,
the availability of each of the Directors. In the event
that Directors are unable to attend meetings, they
receive papers in the normal manner and have the
opportunity to relay their comments and questions
in advance of the meeting, as well as follow up with
the Chair if necessary. The same process applies
in respect of the various Board Committees.
The briefing for each of its meetings covers financial
and operating performance, treasury, risk, human
resources, legal and compliance, internal audit,
IT, GMC, FMPU and CSR matters. Management
accounts are produced for each Board meeting
together with an updated dashboard of key
performance indicators, broken down by
geographical region.
On a monthly basis, the Board receives a
management report covering operations, the
financial and budgetary situation, internal audit,
taxation, treasury, risk, human resources, legal
and compliance matters, and CSR matters.
A further aspect of reporting to the Board is Social
Performance Management (‘SPM’), which covers
the handling of complaints, satisfaction surveys, and
the achievement of social goals. (This is referred to
in more detail in the Non-financial and sustainability
information statement on pages 66 and 67.)
For further information on the Board’s work during
the year and a table of attendance at Board and
Committee meetings, see ‘Board activities’ on
page 72.
Chair and Chief Executive Officer
The division of responsibilities between the
Chair and the CEO has been agreed by the Board.
The Chair has responsibility for the leadership
of the overall effectiveness of the Board, setting
the Board’s agenda, ensuring the maintenance
of a proper balance of skills and experience on
the Board, succession planning, and the provision
to the Board of accurate, clear and timely information
to support sound decision-making and to enable
individual Directors to fulfil their duties.
The Chair during 2023 was Guy Dawson. His other
significant commitments are set out in his biography
on page 69. The Board is satisfied that his other
commitments do not restrict him in carrying out
his duties effectively.
The CEO, Karin Kersten, reports directly to the
Chair of the Board and is responsible for all executive
management within the Group on a day-to-day basis,
within the authority granted by the Board. She is
assisted in this by the Advisor to the CEO, Dirk
Brouwer and a senior management team which
reports to her and meets her on a regular basis.
The Company’s Independent Non-Executive
Directors are Hanny Kemna, Salehuddin Ahmed
and Chris Low. Within the Board’s overall risk and
governance structure, the Independent Non-
Executive Directors are responsible for contributing
sound judgement and objectivity to the Board’s
deliberations and the decision-making process.
They also provide constructive challenge and
oversight, and monitor the Executive Directors’
delivery of the Company’s strategy.
Powers of Directors
The Directors are responsible for the management
of the Company. They may exercise all powers of
the Company, subject to the Articles of Association
and to any directions given by the shareholders
by special resolution.
Appointment and removal of Directors
The appointment of Directors is governed by the
Company’s Articles of Association, the Companies
Act 2006 and other applicable regulations and
policies. Directors may be elected by shareholders
in general meeting or appointed by the Board
of Directors in accordance with the provisions
of the Articles of Association. All of the then
Directors of the Company were re-elected at the
AGM held on 20 June 2023. In accordance with the
Code, all Directors retire and may stand for re-
election at each AGM.
Letters of appointment for individual Directors are
available for inspection by shareholders at each AGM
and during normal business hours at the Company’s
registered office. The Articles of Association provide
that in addition to any power to remove Directors
conferred by the Companies Act 2006, the Company
may remove any Director from office by ordinary
resolution of which special notice has been given.
Board performance evaluation
The Board has recently carried out a self-assessment
exercise about the performance of the Board, the
Committees and the individual Directors in 2023.
As in previous years, the procedure followed
was that each Board and Committee member
completed a questionnaire, adding comments
where appropriate, which was then circulated on
an anonymised, aggregated basis to each member
of the Board. The Chair then discussed the points
arising from this survey with the other Directors.
The review showed that the Board, its Committees,
and individual Directors have continued to work
well together, with progress in the areas identified
for improvement last year. In April, there was
a successful meeting devoted to strategy, at which
the Board received a detailed presentation on the
implementation of the Group’s digital strategy,
which was then thoroughly discussed. With the
establishment of a Diversity, Equity and Inclusion
Committee at the executive level, the Nomination
Committee and Board have been receiving regular
progress reports and are thus now better able
to assess the Group’s success in developing and
promoting female staff. Additionally the Board and
especially the Chairman helped to ensure that there
were good communications with employees and
other stakeholders, particularly concerning the
changes in senior management personnel and
procedures that took place during the year. This
enabled staff morale to be maintained through
a potentially unsettling period, with unwanted
departures kept to a minimum.
Matters identified in the latest Board assessment
as requiring attention include further presentations
on strategic matters, and a review of the composition
and terms of reference of the Board committees
in order to ensure that they remain equal to the
changing demands placed on them.
The Board discussed at length the culture statement,
which sets out the core values, the purpose, vision
and mission statement and believes the culture can
be further developed and that there can be a greater
alignment between practice and culture. Therefore,
the Board has requested management to take action
to ensure the values are practiced throughout the
Group. The Company is purpose driven and its
practices are fully aligned with the purpose.
Reappointment of Directors at the 2024 AGM
The Board has confirmed its view that each
of the Directors continues to be effective and
to demonstrate commitment to his or her role.
On the recommendation of the Nomination
Committee, the Board will therefore be
recommending that:
The Board has determined that the Independent
Non-Executive Directors (Salehuddin Ahmed,
Hanny Kemna and Chris Low) continue to meet
the independence criteria set out in the Code.
Induction and professional development
On appointment, all new Directors receive a
comprehensive and personalised induction
programme to familiarise them with the Group,
tailored to their specific requirements. The Company
also provides bespoke inductions for the relevant
Directors when they are appointed as a Committee
Chair. Induction programmes are tailored to a
Director’s particular requirements, but would
typically include site visits, one-to-one meetings
with Executive Directors, the Company Secretary
and senior management for the business areas and
support functions and meetings with the external
auditor. Directors also receive guidance on Directors’
liabilities and responsibilities.
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Governance framework continued
In addition, the Chairperson and CEO may agree any
specific requirements as part of each Non-Executive
Director’s regular reviews.
Company Secretary
The Company Secretary is responsible for ensuring
that Board procedures and applicable rules and
regulations are observed and for advising the Board,
through the Chair or the General Counsel, on all
governance matters. All Directors have direct access
to the services and advice of the Company Secretary,
who also acts as secretary to the Board Committees.
Conflicts of interest
The Articles of Association include provisions
giving the Directors authority to approve conflicts
of interest and potential conflicts of interest
as permitted under the Companies Act.
A procedure has been established whereby actual
and potential conflicts of interest are regularly
reviewed and appropriate authorisation sought prior
to the appointment of any new Director or if a new
conflict or potential conflict arises. Directors are
regularly reminded that they must declare, before
or at the beginning of the meeting concerned, any
matter on the agenda for the meeting in respect
of which they may have a conflict of interest; they
will, if necessary, withdraw from the meeting during
the discussion of that item and not participate in any
decision relating to it. The decision to authorise
a conflict of interest can only be made by non-
conflicted Directors (effectively, the Independent
Directors’ Committee less any of its members who
may be connected with the relevant conflict), and
in making such a decision the Directors must act in
a way they consider, in good faith, will be most likely
to promote the success of the Company. The Board
is satisfied that this procedure operated effectively
throughout the year.
Board and Committee effectiveness
Annual Board and Committee evaluation
See ‘Board performance evaluation’ on page 76.
Management and operational structure
The Executive Committee, which was restructured
in 2023, consists of the Chief Executive Officer,
the Chief of Operations, the Chief Financial Officer,
the Chief Digital and Information Officer, the Chief
Compliance, Legal and Risk Officer, and the Head
of HR, Communications and Sustainability.
The Head of Internal Audit is a non-voting member
of the Executive Committee; he reports directly
to the Audit Committee of the Board, with a ‘dotted
line’ to the CEO.
The Executive Committee functions as a single body,
and the country managers and department heads
report to it directly. The Group’s operations are
standardised, which allows management’s authority
to be decentralised and delegated (within specified
limits) from the Group to each of its microfinance
institutions.
The chart on the right sets out a simplified overview
of the Group’s management structure as well as
the Group’s operating structure, which is based
on geographical proximity and associated cultural
similarities and is, therefore, segmented into four
regions: South Asia, South East Asia, East Africa
and West Africa.
The Group’s microfinance institutions operate
a total of 2,016 branches across 13 countries in
South Asia, South East Asia, East Africa and West
Africa. Limited administrative layers exist throughout
each in-country branch network, which promotes
the active participation of all staff, quick and
autonomous decision-making capacity, and the
efficient deployment and monitoring of loans.
Each of the Group’s microfinance institutions has
its own Board of Directors (an ‘MFI Board’) which,
in most countries, includes a number of Independent
Directors, as well as members of the Company’s
senior management, such as the Chief Executive and/
or Chief of Operations. The remaining Independent
Directors often have extensive experience in the
microfinance industry or at central banks.
Board of Directors
Operations Compliance, Legal & Risk Internal Audit
Finance (Accounts, Investor
Relations & Treasury)
Human Resources,
Communications & Sustainability
Grievance Mitigation
Digital and Information Technology
South Asia South East Asia East Africa West Africa
Chief Executive Officer
Executive Committee
India
Pakistan
Sri Lanka
The Philippines
Myanmar
Tanzania
Uganda
Rwanda
Kenya
Zambia
Nigeria
Ghana
Sierra Leone
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Governance framework continued
Local management and operational structure
Each of the Group’s microfinance institutions also has
a country-level head office from which the Managing
Director works and manages the microfinance
institution, reporting to the local MFI Board and the
Group’s international corporate headquarters.
Reporting to the Managing Director, the head of
operations is also located in the country head office
and oversees the microfinance institution’s mid-level
management. The country head office also includes
common head office functions, including Finance and
Accounts, Internal Audit, Legal and Compliance,
Information Technology, Human Resources and Risk
Management. Internal Audit reports directly to the
local MFI Board, as well as functionally to the Head
of Group Internal Audit.
Each country’s head office also includes a Fraud and
Misappropriation Prevention Unit, which investigates
unusual branch activity and/or client complaints
through unannounced branch inspections, and
reports to the Managing Director of the microfinance
institution as well as to senior management in the
international corporate headquarters.
The field staff of each microfinance institution
comprises mid-level management and branch staff.
The mid-level managers of each microfinance
institution travel across their respective branch
networks and perform their supervisory functions
in the branch offices, as they generally do not have
separate offices. Mid-level management generally
comprises district managers, regional managers
and area managers, with some larger microfinance
institutions having an assistant district manager or
a deputy head of operations. Each level of mid-level
management is responsible for reporting to its
manager and ultimately to the Managing Director
at the country head office, as well as for inspecting
branches, including attending a specified number
of client group meetings to ensure that operations
are effectively carried out. At client group meetings,
mid-level management also receives client feedback
and follows up any prior client complaints. Each
branch is normally staffed by a branch manager,
an assistant branch manager, loan officers and
supporting staff members.
Substantial shareholdings
The table below sets out details of the interests in
voting rights of 3% or more notified to the Company
as at 31 December 2023 under the provisions of the
FCA’s Disclosure Guidance and Transparency Rules.
Information provided by the Company pursuant
to the Disclosure Guidance and Transparency Rules
is publicly available via the regulatory information
services and on the Company’s website.
Name of Director
Number
of shares % holding
Catalyst
Microfinance
Investors1 29,217,826 29.2%
Conifer Capital
Management2 19,527,159 19.5%
Catalyst Continuity1 17,111,118 17.1%
Phoenician Capital2 10,000,000 10.0%
Redwheel2 4,121,831 4.1%
Renta 4 Gestora 3,067,852 3.1%
1 Dirk Brouwer holds his interest in the Company via CMIMC
(a company under his ultimate control), which in turn holds its
interest in the Company via Catalyst Microfinance Investors
29.2% and Catalyst Continuity 17.1%. Catalyst Microfinance
Investors and Catalyst Continuity own 46.3% in total, each
company (ultimately) controlled by Dirk Brouwer.
2 The holdings of Conifer Capital Management, Phoenician Capital
and Redwheel have been built up over the years.
The above reflects shareholding as of 31 December
2023. Substantial shareholders do not have different
voting rights from other shareholders.
Engagement with shareholders
The Group has an investor relations (‘IR’) programme
to ensure that current and potential shareholders,
as well as financial analysts, are kept informed of
the Group’s performance and have appropriate
access to management to understand the Company’s
business and strategy.
The Board believes it is important to maintain open
and constructive relationships with all shareholders.
The Head of IR, reports to the CFO and is responsible
for managing a structured programme of meetings,
calls and presentations around the main events in
the financial reporting calendar, as well as throughout
the year. The team regularly seeks investor feedback,
directly and via the Group’s corporate brokers, which
is communicated to the Board and management.
The CEO, the Head of IR, and the CFO, speak to,
or meet with, the Group’s major institutional
shareholders on a regular basis. In addition, the Chair
is available to meet or speak to major institutional
shareholders to discuss matters such as strategy,
corporate governance and succession planning.
The Senior Independent Director is available for
shareholders to consult in the event that they have
concerns that contact with the Chair or the CEO
has failed to resolve, or where such contact would be
inappropriate. Separately, the Independent Directors
are available should shareholders wish to discuss any
concerns they may have.
Through the Head of IR, the Board is regularly
updated on the status of the IR programme. An IR
report, summarising share price performance, share
register composition and feedback from any investor
meetings, is produced for Board meetings.
Relevant presentations, together with all results
announcements, Annual Reports, regulatory news
announcements and other relevant documents, are
available on the Investors section of the Company’s
website at asa-international.com/investors.
Stakeholder engagement
In 2023, the Committee executed an action plan to
engage with stakeholders. Each Director assumed
primary responsibility for a specific stakeholder
group. Regarding workforce engagement, given
the substantial number of staff primarily located
in branches, the Company appointed the Chair as
designated director. The chairperson made multiple
visits to the head office and conducted numerous
sessions with staff and their representatives. Refer
to the S172 statement on pages 14 to 16 for further
details on stakeholder engagement.
The Chair of the Audit and Risk Committee has
regular conversations with the Group Head of
Internal Audit and Group CFO, and the Committee
meets members of the senior management team
who attend every Audit and Risk Committee meeting.
Annual General Meeting
The Board regards the Company’s AGM as an
important opportunity for shareholders to discuss
the Group and its performance directly with the
Board. All shareholders have the opportunity
to raise questions with the Board at the AGM,
either in person or by submitting written questions
in advance, and the Chairmen of all of the Board
Committees and the other Directors attend
the meeting.
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Audit and Risk Committee report
As Chair of the Audit and Risk
Committee, I am pleased to
present the Committee’s report
for the financial year ended
31 December 2023.
Chair’s overview
The Committee spent substantial time in monitoring
the cash and liquidity situation, evaluating the
progress of the digitisation and digital transformation
of the business operations, the impact of regulatory
changes on the operating environment, and other
related accounting judgements and disclosures.
The Committee also closely monitored recoveries in
India, licensing in Pakistan, funding across the Group,
profitability and forecasts, covenant breaches and
the changing risk environment including risks posed
by inflation and devaluation of currencies in
operating countries.
This report provides an insight into the functioning
of the Committee and the activities undertaken
by it, including an overview of the principal topics
covered at various meetings of the Committee.
The Committee apportions its time between periodic
review of key present and future risks to the Group
and close scrutiny of the financial reporting and
internal controls of the Company.
The majority of the Committee’s time has been
spent on our principal roles and responsibilities,
which are to:
• Monitor the integrity of the Company’s financial
statements and external financial reporting.
• Assess the impact of the depreciation of
the majority of the currency in the operating
countries and the impact thereof on the
financial position of the Group.
• Review the effectiveness of the Group’s
internal controls.
• Monitor and review the activities and
performance of both the Internal Audit
function and external audit process.
• Monitor the adequacy and effectiveness
of the risk management framework.
• Assess principal and emerging risks and help to
focus the Board’s attention on key risks, especially
in view of inflation and devaluation of currencies.
• Consider key accounting matters and areas
of judgement and changes.
• Discuss specific matters tabled at the request
of the Committee to allow the Committee to zoom
in on topics of interest or concern.
The full terms of reference of the Committee are
available on the Company’s website (under Investors/
Corporate Governance/Audit and Risk Committee).
In 2023, the Committee continued to focus on the
internal controls systems and processes and recovery
from the challenges being faced due to the current
economic scenario.
In particular, the Committee reviewed the provisioning
for expected credit losses in line with IFRS 9 and
whether adequate provisions have been made
considering economic challenges faced by multiple
operating subsidiaries. The committee reviewed
the application of IAS 29 on Hyperinflation as it
was relevant for the first time for the operations in
Ghana and Sierra Leone. The Committee considered
accounting judgements and the framework established
by management to assess and calculate the expected
credit loss for the Group.
The Committee continued to work with
management to further improve the risk-based
internal audit process as well as the reporting of risk.
The Committee will continue to focus its attention on
the key responsibilities listed above, and in particular
on oversight of Internal Audit and the risk control
framework, significant accounting judgements,
review of the external audit scope and fees, review of
anti-money laundering and anti-bribery policies and
whistleblowing arrangements, consideration of the
requirements of the UK Corporate Governance Code
in relation to stakeholder engagement, long-term
viability, risk and going concern. In particular, the
Committee will focus on further development of the
Internal Audit function, including IT audits, as well as
the development, use and security of new and future
IT strategies and systems.
This report sets out the principal
responsibilities of the Audit and
Risk Committee, its membership
and meetings’ as well as our key
activities during the year.
Chris Low
Chair of the Audit and Risk Committee
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Audit and Risk Committee report continued
Audit focus areas in the 2023 financial year
Since 1 January 2023, the Committee has:
• Reviewed the 2022 draft year-end financial
numbers and 2023 interim financial statements
and the auditor’s findings in relation to them,
as well as the responses by management to the
recommendations of the auditor.
• Considered the EY Audit Planning Report for the
2023 year-end audit.
• Reviewed and considered PAR>30 and ageing
buckets.
• Reviewed the accounting impact of the
provisioning for expected credit losses.
• Reviewed the budgets and projections as well
as related going concern and viability statements.
• Reviewed accounting treatment of issuance
of Long-term Incentive Plan (‘LTIP’) Awards.
• Considered the plans and reports from the
internal auditor as well as the quality and
resources (and budget) available to Internal Audit.
• Reviewed the digital strategy of the Company
including digitisation and implementation of the
core banking software from Temenos.
• Considered the potential impact of IAS 29 (hyper
inflation countries). Post closing of the financial
year, Ghana and Sierra Leone have been identified
as hyper inflationary economies. The ARC has
been involved in assessing the impact of IAS 29
hyperinflation.
• Reviewed staffing and recruitment arrangements
for the Internal Audit department.
• Validated reversal of holiday interest
• Reviewed the risk framework and made
recommendations.
• Reviewed KPIs along with climate risk.
• Reviewed staff retention numbers and the
training plan for employees.
• Reviewed key legal and regulatory concerns.
• Reviewed treasury reports, including funding,
liquidity and capital requirements of the Group
as well as the compliance with loan covenants.
• Monitored liquidity across the Group and
reviewed the Liquidity Plan 2023.
• Considered the compliance framework
(including whistleblowing arrangements)
and compliance reports.
• Reviewed the contents of the financial
statements to ensure they are fair, balanced
and understandable to all readers.
• Reviewed whistleblowing reports and
investigations and legal reports with
regulatory updates.
• Reviewed the performance of the current
auditor of the Company.
• Reviewed requirements relating to energy usage
and greenhouse gas emissions and the Task Force
on Climate Disclosures (‘TCFD’) requirements.
• Reviewed third-party salary survey.
• Reviewed health and safety reports.
• Reviewed entity value proposition.
Audit priorities for 2024
Key audit priorities for the coming year include:
• Reviewing the results announcement for 2024
and recommending the 2023 full-year results
to the Board.
• Reviewing significant accounting judgements
as well as going concern, viability statement
and liquidity risks.
• Reviewing non-audit services and other audit
policies and auditor independence rules.
• Looking into the adequacy and security of the
Company’s Anti-Money Laundering (‘AML’) policy
and required whistleblowing arrangements.
• Reviewing the half-yearly report from the external
auditor of the Company as well as the 2024 report
and management letter by the auditor.
• Reviewing the management representation letter
from the external auditor.
• Monitoring liquidity across the Group.
• Monitoring the Internal Audit function, budget,
staffing and internal audit approach.
• Reviewing the audit plan, auditor objectivity and
independence, as well as auditor remuneration.
• Considering, in consultation with internal and
external auditors, the arrangements to be put
in place to report on the effectiveness of the
Group’s internal controls as required by the UK
Corporate Governance Code 2024 with effect
from the 2026 financial year.
• Reviewing whistleblowing policy and the process
of investigation.
Membership and meetings
The Audit and Risk Committee is chaired by myself,
and the other members during 2023 were Salehuddin
Ahmed and Hanny Kemna, both of whom are
Independent Directors.
Hanny Kemna joined the Board in 2018, followed by
Salehuddin Ahmed in 2021, and myself in 2023. In
common with the other Directors, we have been
re-elected at each AGM since we were appointed.
The qualifications of each of the Board members are
outlined in the biographies on page 69. The Board
considers that the current members of the Audit and
Risk Committee have sufficient skills, qualifications
and experience to discharge their duties in
accordance with the Committee’s terms of reference.
In 2023, the Committee met on six occasions. Full
details of attendance by the Non-Executive Directors
at these meetings are set out in the table on page 72.
In addition to the members of the Committee,
standing invitations to attend meetings are extended
to the CEO, the CFO, the Chief Accountant, the Head
of Treasury, the Chief Compliance, Legal and Risk
Officer, the Chief Digital and Information Officer, the
Chief of Operations, representatives of the external
auditor, the Head of Compliance and the Head of
Group Internal Audit. All attend our Committee
meetings as a matter of course and have supported
and informed the Committee’s discussions.
Invitations to attend are extended to other members
of management as required, so that they can brief
the Committee on specific issues under review.
The external auditor, Ernst & Young LLP (‘EY’),
attends each meeting, and I have regular contact
with the lead audit partner throughout the year.
The Committee met with both internal and external
auditors privately (i.e. without members of management
present) at meetings during the year.
Since the Committee has responsibility for both
audit and risk monitoring, this report will address the
activities of both functions during the financial year.
Audit overview
As part of its audit function, the Audit and Risk
Committee is responsible for monitoring the integrity
of the Company’s financial statements and reviewing
and reporting to the Board on significant financial
reporting issues and judgements. The Committee
also considers whether the Company has adopted
appropriate accounting policies and made
appropriate estimates and judgements after taking
into account the views of the auditors.
Other than the above, the Committee monitors:
• Compliance with accounting standards and legal
and regulatory requirements.
• The reporting of related party transactions.
• The basis on which the Group is considered
to be a going concern.
• Any material misstatements in the accounts
that are reported by the external auditor.
• Taxation matters.
Audit of 2023 financial year
International accounting standards
At the beginning of 2023, IFRS 17 took effect
requiring loans to be treated as insurance contracts
if there is any insurance or life assurance aspect
to the relationship between lender and borrower.
There were no further significant changes in the IFRS
reporting standards applicable for the 2023 financial
statements. Early in 2024, but related to the 2023
accounts, the effects of hyperinflation under IAS 29
for Ghana and Sierra Leone were incorporated.
Reporting by the external auditor
The Committee received detailed reporting from the
external auditor in respect of the final and half-yearly
results. The Committee and the external auditor
discussed the key areas of focus including the risk
drivers, the significant risks being risk of fraud in
revenue recognition, valuation of expected credit
loss provisions, valuation of deferred tax assets,
hyperinflation and going concern.
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The Committee reviewed the external auditor’s
opinions, appropriateness of accounting principles
applied to the financial statements and related
disclosures, and management’s report. The
Committee specifically spoke to the external auditor
about going concern and the existence of material
uncertainty, hyperinflation, misappropriation,
revenue recognition and expected credit loss
provisions. The external auditor reported that
the significant audit risks in relation to income
recognition and expected loss provision had been
reported at each stage, and it had not found any
material or reportable differences or fraud after
extensive revenue testing.
The Committee also reviewed the EY external
audit findings and EY Control Observations and
Recommendations Report and the management
response to each observation made by EY. The
Committee had a discussion with management on the
observations including going concern assessment,
assessment of impairment of deferred tax assets,
balance sheet and income statement attestation
and quality and ownership of financial output.
The Committee also discussed the listing
requirements to which the Company is subject,
UK Corporate Governance Rules, and adherence
to planning, timelines and achievable due dates as
a listed company. EY kept the Committee updated
on developments in corporate governance regulation
and practices that were expected to arise over the
next few years, which may require the Company to
produce new types of documentation, particularly
with regard to attestation of internal controls.
Taking into account the external auditor’s
assessment of risk, but also using our own knowledge
of the Group, we reviewed and challenged where
necessary the actions, estimates and judgements
of management in relation to the preparation of
the financial statements.
As part of its role in assessing the integrity of
the Group’s external reporting, the Committee has
continued to pay particular attention to the key areas
of management judgement underpinning the financial
statements. The Committee reviewed the significant
accounting judgements made during the year, the
risks to which the Company was exposed and the
systems in place to mitigate or manage them and
the overall system of internal controls within
the Company.
The Committee reviewed the analysis of the going
concern situation and the waivers that had been
received in respect of the Group’s covenant breaches
on its outstanding borrowings, and concluded that
it continued to be appropriate to prepare accounts
on a going concern basis.
Some observations have been resolved, which
include establishment of the Assets and Liabilities
Committee (‘ALCO’), where the Group’s assets and
liabilities are closely monitored among departments,
and the set-up of offsite disaster recovery, while
others, such as immaterial differences between
MIS and FIS and Stage 3 interest income automation
are in progress and being monitored.
The Group’s liquidity with unrestricted cash and
cash equivalents was approximately USD 48 million
at year end 2023. The Company secured approximately
USD 179 million of new loans from local and
international lenders in 2023.
External audit
The Committee assessed the external audit report
and audit plan for 2023. EY stated that the scope
of the audit was largely unchanged from 2022.
EY visited several countries in the course of the
audit and had operated a comprehensive program
of oversight and direction over all components
within their audit scope.
The auditor identified the following significant risks
for the 2023 audit:
• Going concern – risk factors including elevated
arrears and credit losses resulting in loan
covenant breaches and ongoing global economic
challenges increasing risk of further breaches.
• Valuation of expected credit loss provision.
• The risk of fraud in revenue recognition through
the incorrect recording of revenue arising from
fictitious loans and advances to customers.
Other key areas of focus include capitalisation of
software development costs, hyperinflation
accounting, valuation of deferred tax assets, loan
portfolio measured at fair value through profit and
loss, foreign currency translation, compliance with
laws and regulations, IT systems migration,
and retirement benefit plans.
The Committee concluded that EY remains
independent and that its audit is effective. EY
confirmed that it had carefully monitored the
provision of non-audit services to EY has acted as
the Group’s external audit firm since appointment
by the Board in 2018. The Committee approved EY’s
non-audit services for 2023, including the half-year
2023 review for ASAI Group plc, CAR certification,
interim and final dividend certification for Pakistan,
direct and indirect tax representation and advice
agreement for Kenya, deposit liabilities premium
calculation for Nigeria, tax consultancy services for
Ghana, and Tier I readiness assessment services and
tax audit handling for Tanzania in 2021 and 2022.
The Group’s policy for auditor rotation and audit
tender follows regulatory requirements, and
the audit firm will be rotated after no more than
20 years, with an audit tender to be held after no
more than ten years.
Other financial reporting and financial update
Interim announcement
The Committee reviewed the draft announcement
and interim financial statements.
Financial update
The Committee reviewed financial updates from
management and discussed various items including
PAR>30 ratio, debt-equity ratios, liquidity, cost
of funding, impact of forex on cost base, other
operating income, salary inflation, currency
depreciation in Asian and African countries,
the financial timetable, preparations for the half-year
review and year-end audit, cost to income ratio and
increase in operating costs, write-off and recovery
of debts, tax expenses, expected credit loss, and
market expectations.
The Committee requested and received
presentations from management explaining the
key issues raised by analysts, investors and press.
The Committee also discussed the decision to charge
interest over holiday periods and reversal of the
same in Ghana.
Policy oversight and review
Whistleblowing
The Committee and the Group place a high priority
on all employees understanding the process for
reporting concerns, so that they all feel able to speak
out when appropriate. In respect of all operating
subsidiaries, all concerns are reported directly to the
head of the Audit and Risk Committee (‘ARC’) of that
country; and in respect of all headquarters/holding
company staff (in Dhaka and the Netherlands) any
instances are directed to me as the Chair of the
Group Audit and Risk Committee. The Chair passes
the concern(s) to the Head of Internal Audit and
discusses them with the Board; in this way we ensure
that arrangements are in place for the proportionate
and independent investigation of such matters and
for follow-up action.
Other policies
Emphasis was placed on regular review by the Board
of policies such as anti-bribery and corruption, AML
and implementation of the Transfer Pricing Policy.
The Committee noted that all key manuals are in
place and requested guidance from the Compliance
Officer on the review and approval process.
The Compliance Officer prepared a systematic
compliance framework, identifying gaps in the
existing framework, and has been instructed to
further develop all manuals and carry out training on
priority. The Committee also emphasised that there
should be a zero-tolerance policy for cases of sexual
or racial harassment.
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Audit and Risk Committee report continued
Internal Audit
During the year, the Committee held several
discussions with the Head of Internal Audit to ensure
that they had enough resources and, regular reports
continue to be delivered to the Committee. The
Internal Audit team was provided online access to the
data of subsidiaries, although all information required
for auditing transactions was not online and the
Committee noted that internal audits planned for
2023 had mostly been completed on schedule. It was
also decided that internal audit software would be
developed internally. The software has been rolled
out in two countries (Kenya and Tanzania), as well
as the Group, and is expected to be rolled out in the
rest of the entities in 2024.
At each meeting the Committee receives a report
from the Head of Group Internal Audit summarising
audits completed as well as monitoring progress
on agreed actions from previous audits.
Internal Audit reported that the key concerns were
inadequacies in loan recovery, loan disbursement
with inadequate due diligence and other operational
issues. Internal Audit also focused on health and
safety issues, compliance matters and IT Security and
Compliance issues. The Committee worked to ensure
that the management would respond to issues raised
by Internal Audit within a specified time.
The Committee had discussions with management
to ensure adequate staffing of the Internal Audit
department and had several discussions on the
reasons for staff turnover. The Committee continues
to keep the level of resources of the Internal Audit
team under review and holds meetings with the
Head of Group Internal Audit from time to time.
The Committee reviewed and approved the
risk-based branch audit plan for 2024, the risk-based
process and control audit plan for 2024 and the
Internal Audit budget. The Chair was actively
involved in recruitment of the Head of Internal
Audit and also gave attention to other vacancies
of Head of Audits in countries. Following a hiring
process in 2023, the Group’s new Head of Internal
Audit officially joined in March 2024, replacing the
previous incumbent.
IT organisation and digital strategy
The Committee spent considerable time on the IT
organisation and the digital strategy. The Committee
continued to monitor the digitisation process and
required the Company to prepare back-up plans
in case of cyber-attacks and the disaster recovery
arrangements in such an event. The Committee also
monitored implementation of the effective interest
rate loans and lockdown interest across countries
and the changes to AMBS in relation thereto.
Operations, Finance and IT worked closely together
to define the parameters and implement solutions
and we continue to improve the development
process, having further strengthened management
and coordination between departments.
The Committee also monitored the progress of
the digital strategy of the Group, including the
development of the real-time smartphone or mobile
app and its piloting in some countries, as well as the
implementation of the Core Banking System acquired
from Temenos Transact (T24) in Ghana and Pakistan.
The focus on increasing digitisation and digitalisation
across the Group increased further during 2023
with the ongoing implementation of Temenos
Transact, which will be rolled out over the coming
years in selected markets in order to improve the
deposit-taking capacity of the Company, as well as
the roll out of digital financial services in Ghana and
other markets. The Committee also recognises the
need for strong cyber defences to protect its systems
and customer data and to prepare the Company
for a digital financial services environment.
The Company will continue to run its current AMBS
systems in all but the above two markets. The
deployment of Temenos Transact (T24) in other
markets is expected to be a multi-year project.
The IT technology strategy is constantly under
review by the Board and this Committee in order
to ensure that we are keeping pace with, and
responding to, the latest industry developments,
especially in digital finance. IT capability will
continue to be assessed in the context of risk
appetite, being part of the Company’s operational
risk. The Committee considered the effectiveness
of the internal control systems and believes that
they are adequate. The Committee also discussed
the preparedness of the Company to deal with
cyber-attacks and disaster recovery procedures.
The Committee also discussed the recommendations
by the external auditor relating to IT. EY submitted
its report on the IT Audit pursuant to revised
International Standard on Auditing (UK) 315,
Identifying and Assessing the Risks of Material
Misstatement pursuant to which EY performed new
and additional procedures to understand the Group’s
use of IT, IT processes related to IT applications
relevant to audit used in different accounting
processes, and where relevant, IT general controls
that address IT risks in the IT processes. EY noted
overall improvements in IT control design and
implementation since the last IT audit in 2018.
Risk management overview
As part of its risk management function, one
of the Audit and Risk Committee’s principal roles
and responsibilities is to support the Board in its
oversight of risk management across the Group.
The identification, management and mitigation of
risk are fundamental to the success of the Group.
The ASA Model of Microfinance has proved to be
robust in managing operational risk, but we aim to
continue to retain and recruit the skills and talents
needed to meet the challenges we face in our various
operating markets and continuously review the
adequacy of procedures and operational controls.
The reporting, based on the three lines of defence
model, allows us to ensure that principal risks are
identified and debated and that senior management’s
plans for risk mitigation are well understood and
appropriately resourced. The Committee requires
senior management to focus, as far as its reports
to the Committee and Board are concerned, on
presenting key risks. Senior management provides
risk reports to the Committee on a quarterly basis.
These reports contain a summary of the key risks
and senior management’s risk assessment along
with any mitigation actions where relevant.
The management team also provides a full summary
of its risk appetite in relation to its key performance
indicators.
This risk reporting process as well as the regular
reviews by the Committee were in place and
functioning effectively in 2023.
Risk management: activity in financial year 2023
The Risk function continued to evolve in 2023.
We continue to work with senior management
to ensure our three lines of defence model is fully
embedded across our Group and that the governance
and reporting structures continue to provide ever
more effective oversight of our risk management.
These actions have continued to improve the flow
of management information to the Committee,
increasing the effectiveness of its challenge
and oversight and enhancing visibility on risk
and compliance issues identified at all levels
across the Group.
The Committee carefully assessed the impact on
portfolio quality, collection efficiency, bad debt write-
off and recoveries, and PAR>30, especially in India,
Myanmar, Nigeria and Sierra Leone. The Committee
maintained its focus on the Group’s policies,
programmes and practices for strengthening and
prioritising our ability to test, detect, resolve and
recover from unforeseen operational disruptions
in our key markets.
The risk taxonomy of the Group had been
reviewed and updated during the year to achieve
a comprehensive coverage of risks. The Committee
reviewed the risk management reports presented by
management and the actions being taken to manage
or mitigate the key risks. The Committee was actively
involved in improving risk reporting by management.
The Committee noted that inflation risk was a key
risk during 2023 primarily attributed to elevated
inflation rates observed in a number of countries.
Data migration risk remains medium due to a number
of ongoing projects. However, the Group has
enhanced IT capabilities and has seen successful
advancement in the ongoing projects. It also noted
that business growth (due to reduction of loan
portfolio in India) was a high risk during 2023.
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Audit and Risk Committee report continued
It further noted that liquidity risk and exchange rate
risk were high and also discussed the climate risk
reports including risk of flooding at head office
locations and important health and safety measures.
Health and safety, liquidity and IT risks were standing
items for discussion at meetings held in 2023 and
will continue to be discussed in 2024. Assessment
of emerging risks (required under the 2018 Code)
will be a standing agenda item for the Committee’s
discussion in 2024.
We continue to encourage the Company to engage
actively with regulators and industry bodies to
ensure that our compliance framework remains
appropriate and relevant for all of our businesses.
The Legal and Compliance team works closely with
colleagues in different countries, providing regulatory
advice, as well as shaping policies, delivering training
and conducting assurance reviews. The Group
Compliance Officer was also appointed as the
dedicated AML officer.
Looking ahead to 2024: risk priorities
Key risk priorities for the coming year include:
• Stabilising and improving the size and quality
of the loan portfolio.
• Monitoring liquidity risk in light of delays in
receiving dividends from subsidiaries and in
the light of the significant currency devaluation
to the USD in our largest operations.
• Effective management and reporting of key
risks, specifically foreign exchange exposure,
regulatory risks, as well as any other material
developing concerns.
• Advancement and continuous assessment of the
Group’s IT infrastructure, including deployment
of the Temenos Core Banking System in selected
markets and digital financial services, as well
as maintaining and improving AMBS to meet
new requirements for upgrades in the markets
where it is still used.
• Improving Internal Audit to allow for more
effective risk-based internal audit reviews.
• Implementation and monitoring of the Health
and Safety Policy.
Committee roles and responsibilities
The Committee keeps under review the adequacy
and effectiveness of the Company’s internal financial
controls and risk management systems and the
Group’s procedures for identifying, assessing
and managing risk.
Committee effectiveness
A formal evaluation of the Committee’s performance
took place as part of the wider Board evaluation of
performance in 2023 and will be undertaken again
at the end of 2024. The Committee considers that it
possesses the right skills, and has access to the right
resources, to enable it to carry out its duties, and that
it has continued to perform effectively. It continues
to have good relationships with the auditors, who
provide helpful and thorough reports and advice at
meetings. The Committee Chairman is in frequent
contact with the senior management of the Group
to discuss business performance, emerging risks,
and the competitive environment. The handover to
the new Committee Chairman, Chris Low (who was
already a member of the Committee), was managed
smoothly following Gavin Laws’s retirement from
the Board at the 2023 AGM.
The Head of Internal Audit continues to report
directly to the Committee and meet the Committee
Chairman regularly outside the Committee meetings
cycle; in a welcome development, he now also
attends meetings of the Executive Committee,
receiving a higher internal profile and a more
visible degree of management support.
Looking ahead, the Committee considers that its
required mix of skills will include more banking
experience, as an increasing number of deposit-
taking licences are obtained by the Group. The risk
management framework, including emerging risks,
requires an increasing amount of the Committee’s
attention, and training on accounting standards,
etc will also need to be kept up to date.
Monitoring liquidity plans
The Committee considered further reports from
management on the Group’s cash situation, which
continued to be affected by delays in obtaining
dividends from the operating subsidiaries due to
central bank intervention, and by devaluation itself.
Various potential scenarios for 2024 were discussed
and the Committee has requested that senior
management keep it informed of any developments
in the liquidity situation.
Other matters
Other, more routine, matters discussed included:
• Legal and regulatory update reports were routinely
received and reviewed by the Committee.
Viability statement
During the year, the ARC has considered a wide
range of information relating to present and future
projections of profitability, liquidity, currency
devaluations, inflation and operating costs. These
considerations relate to the global economic
uncertainty and its impact on the Company’s
operations, as well as considering potential impacts
from other top and emerging risks, and their related
impact on profitability, capital and liquidity. In
accordance with the UK Corporate Governance
Code, the Directors carried out a robust assessment
of the principal risks of the Group. In accordance with
provision C.2.2 of the UK Corporate Governance
Code, the Board confirms that it has a reasonable
expectation that the Group will continue to operate
and meet its liabilities, as they fall due, for the
three-year period up to 2026.
The Directors’ assessment has been made with
reference to:
• The Group’s current position and prospects –
please see the Financial review on pages 25 to 36;
• The Group’s business model and strategy – please
see our business model, our strategy and Key
Performance Indicators on pages 12, 17 to 19
and 24;
• The Group’s recent cash position as per 31 March
2024, including access to funding from local and
international sources on pages 25 to 36;
• The Board’s risk appetite, and the robust
assessment of the Group’s principal risks and how
these are managed on pages 37 to 47;
• The material uncertainty in relation to going
concern as detailed in note 2.1 of the financial
statements; and
• Risk management approach on pages 37 and 38.
Finally, the Directors reviewed the viability scenarios
as well as the Group’s strategy and five-year business
plan on an annual basis. The viability scenarios sets
forth the Group’s monthly projections of profitability,
cash flows, capital requirements and resources and
other key financial and regulatory ratios for the
period until December 2025 and annual projections
for the period 2026–2028.
Chris Low
Chair of the Audit and Risk Committee
26 April 2024
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Nomination Committee report
This report gives details of the
activities of the Nomination
Committee in connection with
Board and executive succession
planning, and progress towards
goals for diversity, equity
and inclusion.
The Committee is responsible for succession
planning for the Board, maintaining a pipeline
of strong candidates for potential nomination as
Non-Executive Directors and Executive Directors,
while also ensuring robust succession planning
for the Executive Committee.
As stated in last year’s Nomination Committee
report, in February 2023, the Committee
recommended the CEO succession plan to the Board
for approval. Under that plan Mr Brouwer retired as
CEO after the 2023 AGM in June, becoming Deputy
Chairman and Special Advisor, and was succeeded
by Karin Kersten (previously the Executive Director,
Corporate Development). This change was followed
by other changes of personnel and of responsibilities
at the senior executive level, which have been kept
under frequent review by the Committee.
An overview of the Committee’s roles and
responsibilities, and its key activities during the
year, is set out in the report below.
Key activities in the 2023 financial year
During the year the Committee discussed:
• Board composition and succession, including the
recruitment of Chris Low to succeed Gavin Laws,
who retired at the Annual General Meeting
(‘AGM’) in 2023.
• Executive management succession planning,
including the recruitment of a new Head of
Internal Audit and the re-allocation of the duties
of the Executive Director, Operations on his
retirement in June. The Committee also reviewed
the composition of the Executive Committee
headed by the CEO.
• The assessment of senior executives, including
their skill sets, knowledge and experience, in
order to ensure that an appropriate balance
of such qualities has been maintained.
• Gender diversity targets, and increasing the
proportion of female staff at the head office and
country levels, including in senior management
at the country level. The Committee welcomed
the establishment of a Diversity, Equity and
Inclusion Committee chaired by Ms Kersten.
• The CEO succession (see above).
This is the sixth annual report on
the activities of the Nomination
Committee following the listing
of the Company.
Guy Dawson
Chairman of the Nomination Committee
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Nomination Committee report continued
Committee roles and responsibilities
The Committee’s key roles and responsibilities are:
• Regularly reviewing the size, structure and
composition of the Board, and making
recommendations to the Board with regard
to any changes.
• Considering the leadership needs of the Group,
including succession planning for Directors and
for senior executives.
• Identifying and recommending candidates
to fill Board vacancies when they arise, for
the Board’s approval.
• Making recommendations to the Board
concerning the formulation of plans for
succession for both Executive and Non-Executive
Directors and suitable candidates for the roles
of Senior Independent Director and Chairmen
of Board Committees.
• Considering the appointment or retirement
of any Directors.
• Reviewing the continued independence
of the Non-Executive Directors.
• Evaluating the Board’s balance of skills,
knowledge, experience and diversity.
• Preparing a description of the role and
responsibilities required for a particular
appointment.
• Being actively involved in the appointment
process for the Chairman of the Board.
• Reviewing the results of the annual Board
performance evaluation process that relate
to the composition of the Board.
• Reviewing annually the time commitment
required from Non-Executive Directors.
The Committee’s roles and responsibilities are set
out in the terms of reference and are available
on the website of the Company.
Membership and meetings
The Nomination Committee is chaired by myself, and
the other members are Hanny Kemna and Salehuddin
Ahmed. The composition of the Committee satisfies
the relevant requirements of the UK Corporate
Governance Code (‘the Code’).
Other individuals, such as the Group HR Director
and external professional advisers, may be invited
to attend all or part of any meeting, as and when
appropriate and necessary. The Committee met five
times during the year: in February (twice), and in
April, September and December 2023. The details
of members’ attendance are set out on page 72.
Changes to the Board
Please refer to page 72.
Directors’ skill sets
Karin Kersten has had 24 years’ experience of
banking, most recently of trade and commodity
finance at a senior level in ABN AMRO Bank. The
Committee also considered and reaffirmed the skill
sets and experience of the Company’s Non-Executive
Directors, including their extensive experience within
financial services.
Dirk Brouwer is an experienced investment banker,
having held senior roles in PaineWebber and Merrill
Lynch as well as over 16 years of experience in
microfinance as Director of ASA International.
Guy Dawson has extensive business and financial
experience, including as a Non-Executive Director, as
well as Vice-Chairman and Chairman roles at Nomura
International plc and Merrill Lynch.
Gavin Laws has worked in the banking industry for
over 30 years, including multiple senior executive
roles at Standard Chartered Bank; he currently sits
on a number of UK boards.
Hanny Kemna brings over 20 years of experience as
Global Lead Partner of Operations and IT at Ernst &
Young, as well as broad experience as a supervisory
board member of a variety of financial institutions.
Salehuddin Ahmed is Professor at the Business
School of BRAC University, Dhaka, Bangladesh.
Mr Ahmed is also on advisory bodies of several
government and non-government agencies in
Bangladesh and a member of the board of trustees
of two universities and a college, and was the
Governor of the Bangladesh Bank (Central Bank)
between 2005 and 2009.
Chris Low was I&M Group Plc’s Regional Director
for its East Africa businesses. He advises several
FinTech start-ups and sits on the Boards of United
Bank for Africa (UK) Ltd, EdPartners Africa Holdings
Ltd, the Scottish African Business Association,
and is a member of the Investment Committee of
Zephyr Acorn Venture Fund, an investor in early-
stage impact companies. With over 30 years in
international financial services, risk management
and digital transformation, Mr Low has specialised
in emerging markets, working across Africa, Asia
and the Middle East.
Further information on the background and
experience of each of the Directors can be found
in their biographies on page 69.
Succession planning – Board and senior
management
The Committee manages Board and senior
management succession under a structured,
proactive methodology. The Committee kept under
review the Group’s succession planning at Board and
senior management level, including in the various
countries, and notes that the gaps in the executive
succession plan are steadily being filled. The search
for a new Non-Executive Director in 2022 ended
with the appointment of Chris Low in February 2023.
In 2023, the Committee kept under review the
succession plans for senior management across the
Group, in the light of the evolving business outlook
and also the CEO succession plan (see below).
The Committee recommended the CEO succession
plan (subsequently approved by the Board) on
23 February 2023, pursuant to which Mr Brouwer
remained as CEO until the 2023 AGM, at which
point Ms Karin Kersten, then Executive Director,
Corporate Development, was appointed CEO. At
the same AGM, Mr Brouwer stepped into a new role.
He was appointed as (i) Deputy Chairman of the
Board of ASA International and (ii) Special Adviser
to the new CEO, the Executive Committee and the
broader management team in order to (a) smoothen
the path of transition and (b) support the new
leadership going forward. The Committee also
discussed and recommended the new governance
structure and restructuring of the Executive
Committee.
The Committee also reviewed progress on leadership
training for potential successors to the most senior
roles in the Company and will continue to monitor
progress with the management succession plan
regularly in 2024.
Diversity
The Committee fully supports the policy of increasing
diversity at each level of the Group, and it regularly
reviews gender diversity data in particular (ethnic
diversity presents less of a challenge, thanks to the
Group’s wide geographical spread of operations).
The Committee considers that the Board remains
diverse in the broadest sense, drawing on the
knowledge, skills and experience of Directors from
a range of professional and cultural backgrounds.
Currently two of the Company’s six Directors are
women and we intend, subject to the need for all
appointments to be made on merit against objective
criteria, to increase female Board representation
still further. At the operational level, too, the
representation of women is higher than before.
The Group places a high priority on making ASA
International appeal to a diverse population, and
its commitment to equal, respectful and dignified
treatment throughout recruitment processes
and through all stages of the employee cycle is
underpinned by the Group’s Non-Discrimination
Policy, as referenced below.
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Nomination Committee report continued
The Committee discussed the increasing importance
of gender, national and cultural diversity. Under the
direction of the new Diversity Equity, and Inclusion
(‘DEI’) Committee chaired by the CEO, the Company
continues to focus on appointing more women in
senior management roles, training female staff for
leadership roles at the entity level and stepping up
the hiring of women across the board; and the country
managements are now working towards firm targets
for increasing the proportion of female staff. Progress
on this front, which varies according to local cultural
norms, is tracked by the Committee. The key ratio of
female to male employees is increasing faster in some
countries than in others, and therefore ‘softer’ targets,
such as creating a more female-friendly working
environment, are now also being set, as ASA
International works towards achieving its aim of
having a workforce that reflects more closely its
mostly female client base. Read about DEI efforts
on page 53.
Information prepared under the new Financial
Conduct Authority (‘FCA’) rules on Diversity and
inclusion on company boards and executive
management can be found on page 53.
For compliance with UK Listing Rule 9.8.6 (10) and
(9), the following disclosure to the right is provided.
Non-Discrimination Policy
Unfair discrimination in any form is not acceptable.
Management and employees are expected to ensure
that a fair and sympathetic work environment exists
for all employees, irrespective of marital status,
religion, disability, sexuality, gender, racial or ethnic
background. This policy of equal opportunities
and diversity applies to recruitment, remuneration,
training, staff development, promotion, discipline,
and all other aspects of employment. The policy also
applies to volunteers, interns, current or prospective
clients, suppliers or beneficiaries, and all others
outside ASA International with whom the Company
or its employees do business.
More detail on the Group’s approach to diversity
can be found in the ESG report on page 53.
Insurance
The Company renewed its D&O insurance which
covers up to USD 10 million in claims.
Reappointment of Directors
Prior to the Company’s AGM each year, the
Committee considers and makes recommendations
to the Board concerning the reappointment of the
Directors, having regard to their performance and
ability to continue to contribute to the Board.
The Board has concluded that the Non-Executive
Directors remain independent and continue to make
a significant contribution to the Board and its
Committees.
Following this year’s review in advance of the 2024
AGM, the Committee recommended to the Board
that all serving Directors be recommended to the
shareholders for re-election at the AGM.
Committee effectiveness
The annual evaluation of the Committee’s
effectiveness has been undertaken in respect
of 2023. The Committee continued to function
well during 2023, with succession planning
and succession management as the main focus
of attention against a background of senior
management restructuring. Management is
appreciative of the support given by the Committee
and especially its Chairman at that time. For further
information, see ‘Board performance evaluation’
on page 76.
In 2024, the Committee will focus its attention
once again on succession among the Non-executive
Directors, taking into account as always the Board’s
and Committees’ skills and balance requirements.
The Committee considers that it has access
to sufficient resources to enable it to carry out
its duties.
Guy Dawson
Chairman of the Nomination Committee
26 April 2024
Numeric data – UK Listing Rule 9.8.6 (10)
Percentage of
the Board
Number of
senior positions
on the Board
(CEO, CFO,
and Chair)
Number in
executive
management
Percentage of
executive
management
Number of
Board directors
Sex
Men 4 67% 1 6 86%
Women 2 33% 2 1 14%
Other Categories 0 0% 0 0 0%
Not specified / Prefer not
to say 0 0% 0 0 0%
Ethnicity
White British or other White
(including minority-white
groups) 5 83% 3 2 29%
Mixed/Multiple ethnic
groups 0 0% 0 0 0%
Asian/Asian British 1 17% 0 4 57%
Black/African/Caribbean/
Black British 0 0% 0 0 0%
Other ethnic group including
Arab 0 0% 0 0 0%
Not specified/prefer not
to say 0 0% 0 1 14%
Compliance – UK Listing rule 9.8.6 (9)
Listing Rules Requirements
Outcome ASA International Plc position as at 31 December 2023
At least 40% of Board directors
are women
Target not met 33% of the Board directors are women. This matter will
be taken into account when a new director is considered.
At least one senior Board position
held by a woman
Target met The positions of CEO and senior independent directors
are held by women.
At least one Board director from
a minority ethnic background
Target met
One Board director is from a minority ethnic background
.
1 All data as at 31 December 2023 (the reference date).
2 Data was collected via self-reporting methods, via an email data collection exercise (with options aligned to the categories specified in the
Listing Rules.
3 The Group CEO is a member of both the Board and executive management and so is counted in both groups in the above table.
4 Changes since the reference date: Md. Ezazul Islam joined the Executive Management on 21 March 2024. His predecessor had the same sex
and ethnicity, so there is no change to the numbers or percentages of the executive management.
5 Per definition within the Listing Rules, executive management within ASA International is the Group Executive Committee.
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Remuneration Committee report
Annual statement from the Remuneration
Committee Chair
On behalf of the Remuneration Committee,
I am pleased to present the report on Directors’
remuneration for the 2023 financial year.
Remuneration Policy
The Remuneration Policy set out in this report was
last approved by the shareholders at the 2023 AGM,
and applies to Board remuneration for three years
from the date of approval. The policy will therefore
next be presented for approval at the 2026 AGM,
unless the Board decides to propose alterations
to the policy before then.
How the Group performed
2023 saw improved operational results in most
markets, despite a challenging operating
environment, especially in India and Myanmar.
Staff retention has been strong at 76%.
Key activities in the 2023 financial year
During the year the Committee met on four
occasions and:
• Reviewed the culture statement and
recommended for approval.
• Reviewed certain salary adjustment to key
employees (due to inflation).
• Discussed the development of a Group-wide
performance management and evaluation
system for staff.
• Reviewed the salaries of key executives against
a peer group benchmark assessment (conducted
by the independent consultants Willis Towers
Watson), following changes in executive roles
and responsibilities during the year.
• Reviewed Group travel policy.
• Recommended to the Board approval of pay
elements for Mr Aminur Rashid upon his retirement
from the Board (as set out later in this report).
• Recommended to the Board approval of a salary
increase for Ms Karin Kersten, and a salary
reduction for Mr Brouwer, upon Ms Kersten’s
appointment as CEO, based on Willis Towers
Watson’s benchmark survey (as set out later
in this report).
• Reviewed the draft Remuneration Report for
2022 , including changes to the Remuneration
Policy to be approved by shareholders at the
2023 AGM.
Priorities for 2024
• To continue to oversee the making of LTIP awards
under the stock option scheme.
• To oversee the development and implementation
of a staff performance management and
evaluation system that is supportive of the
current business model while also being geared
to the requirements of the future.
• To ensure that key staff across the Group
continue to be rewarded appropriately.
• The Company intends to grant options to
directors in 2024 but the basis for grant and the
timing has not yet been determined. Such options
will be exercisable on substantially the same
terms as those granted in 2022 and 2023. There is
no current intention to increase directors’ salaries
or fees in 2024.
Remuneration in 2023
The Committee’s approach to remuneration
continues to be centred around the Company’s
business model. ASA International has a long-
established model, and its human resources policies
are tailored to this model including its standardised
remuneration policies.
In 2022, the Committee approved a fee increase of
GBP 5,000 for Non-Executive Directors with effect
from 1 January 2023 pursuant to the report of the
independent advisors FIT Remuneration Consultants
(which included a review of NED fees at peer group
companies), noting that the basic fee of GBP 50,000
had not increased since 2018. With the exception
of the changes in Ms Kersten’s and Mr Brouwer’s
salaries mentioned above, there was no increase in
the Executive Directors’ remuneration during 2023
(except for the standard – in Bangladesh – fixed-rate
increment for the Executive Director, Operations, who
retired on 1 July 2023 and annual festival bonus).
Employee base salaries are subject to an annual cost
of living increase: average total compensation for
employees of the Group increased by 0.7% in 2023.
This remuneration report contains
information about the remuneration
policy of the Company and details
about remuneration of the
Company’s Directors
Hanny Kemna
Chairman of the Remuneration Committee
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Remuneration Committee report continued
1. Remuneration Committee roles and
responsibilities
The Remuneration Committee assists the Board
in determining its responsibilities in relation to
remuneration. This includes making recommendations
to the Board on the Company’s policy on executive
remuneration, setting the overarching principles,
parameters and governance framework of the
Group’s Remuneration Policy and determining the
individual remuneration and benefits package of each
of the Company’s Executive Directors. This includes
the following key objectives:
• Establish and maintain a competitive remuneration
package to attract, motivate and retain high-
calibre Executive Directors (‘EDs’) and senior
management across the Group.
• Promote the achievement of the Group’s annual
plans and strategic objectives by providing an
employee remuneration and benefits package
that contains appropriately motivating targets
that are consistent with the Group’s risk appetite.
• Align senior executives’ remuneration with the
interests of shareholders.
The Remuneration Committee will also ensure
compliance with the UK Corporate Governance
Code in relation to remuneration. The Committee’s
main responsibilities are to:
• Review and determine the total remuneration
packages of EDs and other senior executives
in consultation with the Chairman and CEO
and within the terms of the agreed policy.
• Approve the design and targets of any performance-
related pay schemes operated by the Group.
• Ensure that contractual terms on termination
and any payments made are fair to the individual
and the Group, that failure is not rewarded and
that a duty to mitigate risk is fully recognised.
• Review any major changes in employee
remuneration and benefits structures throughout
the Group.
• Select, appoint and determine terms of reference
for independent remuneration consultants
to advise the Committee on remuneration policy
and levels of remuneration.
• Ensure that the remuneration structures in
the Group are compliant with the rules and
requirements of regulators and all relevant
legislation, and that any deviations are agreed in
the interest of the Company and its stakeholders.
• Address the requirements as specified in
the Corporate Governance Code for clarity,
transparency, simplicity, mitigation of reputational
risk, proportionality and alignment to culture and
strategy; and whether the Remuneration Policy
operates as intended in terms of Company
performance and quantum and if not what
changes are necessary.
• Seek advice from Group control functions
to ensure remuneration structures and annual
bonuses are appropriately aligned to the Group’s
risk appetite.
2. Remuneration Committee membership
The UK Corporate Governance Code provides that
a Remuneration Committee should comprise at least
three members who are independent Non-Executive
Directors (other than the Chairman of the Board).
The Remuneration Committee is chaired by Hanny
Kemna, and its other members are Salehuddin
Ahmed and Chris Low, who joined the Committee
upon the retirement of Gavin Laws at the 2023 AGM.
All of them are independent. Details of members’
attendance at meetings in 2023 are set out on
page 72.
3. Directors’ and key managers’ salaries
Following the 2023 AGM in June, Ms Kersten
succeeded Mr Brouwer as Chief Executive (as had
been announced on 24 February 2023). Mr Brouwer
was appointed as (i) Deputy Chairman of the Board
of ASA International and (ii) Special Adviser to the
new CEO, the Executive Committee and the broader
management team in order to (a) smoothen the path
of transition and (b) support the new leadership going
forward. In this capacity the Board fully expects
Mr. Brouwer to continue to make a significant
contribution to the strategic and operational
development of the business.
Ms Kersten’s salary was increased from Euros
254,925 (which had applied from the time she joined
ASA as an employee in October 2021) to Euro
375,000 upon her appointment as Chief Executive
Officer. She was also enrolled in the Company’s
pension scheme and received an exceptional award
of 125,088 share options under the LTIP. Ms Kersten
is employed under a Dutch employment agreement
and in accordance with Dutch law requirements
she will be required to give 3 months’ notice of
termination of employment and receive 6 months’
notice to terminate her employment.
Mr Brouwer’s initial salary in his new role is
USD 375,000 (a reduction of USD50,000 from
his salary as CEO). Over time, Mr Brouwer’s salary
will decrease, but will not fall below USD 200,000
Mr Brouwer is not entitled to any pension
contribution by the Company, and will not receive
any further variable remuneration, including LTIP
grants. Mr Brouwer is employed under a Dutch
employment agreement as of June 15, 2023 and
in accordance with Dutch law requirements he will
be required to give 3 months’ notice of termination
of employment and receive 6 months’ notice to
terminate his employment. Mr Brouwer’s change
of role will not impact his outstanding LTIP award.
The salary levels for senior managers responsible
for managing the Group were initially set in 2018
based on advice received from the remuneration
consultants Willis Towers Watson who performed
a benchmarking study of salaries in Dhaka and the
Netherlands at the time of the IPO in 2018, which
was updated in 2023. These salaries have over time
been adjusted to reflect individual promotions. The
majority of senior management was rewarded at the
time of the IPO through the vesting of share options.
In addition, as described below a selected group
of employees was awarded stock options in 2022.
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Remuneration Committee report continued
Salaries at a country level are set by the local country management. Through our employee surveys,
management collects insights on salary expectations. The Company also considers salary levels paid in the
local markets including those paid by our competitors. In 2023, the average percentage increase in salaries
at the Group was 1.1%, and the actual increase in expenditure was 2.8% (see table below).
Particulars
Total
(2023)
USD‘000
Total
(2022)
USD‘000
Increase
in
USD‘000 %
Employees’ remuneration 62,159 60,475 1,684 2.8
The Company has adopted an LTIP as more fully described on pages 80 and 84.
Key performance indicators
Annual salary/fee 2023 2022 2021 2020 2019
% change
2023
–2022
% change
2022
–2021
% change
2021
–2020
% change
2020
–2019
Number of clients (m) 2.3 2.3 2.4 2.4 2.5 1% -3% +0% -6%
Number of branches 2,016 2,028 2,044 1,965 1,895 -1% -1% +4% +4%
Net loss/profit 14.4 17.9 6.4 -1.4 34.5 -19% +181% +556% +104%
OLP1 361.9 351.2 403.7 415.3 467.4 +5% -13% -3% -11%
PAR>30 days2 2.1% 5.9% 5.2% 13.1% 1.5% -3.8% +0.7% -7.9% +11.6
1 Outstanding loan portfolio (‘OLP’) includes off-book Business Correspondent (‘BC’) loans and Direct Assignment loans, excludes interest
receivable, unamortised loan processing fees, and deducts modification losses and ECL provisions from Gross OLP.
2 PAR>30 is the percentage of on-book OLP that has one or more instalment of repayment of principal past due for more than 30 days
and less than 365 days, divided by the Gross OLP.
The annual percentage change in the Directors’ pay over the five years to 2023, compared to the average
for other employees, is set out below:
Annual salary/fee 2023 2022 2021 2020 2019
%
change
2023
–2022
%
change
2022
–2021
%
change
2021
–2020
Executive Directors: (USD)
Dirk Brouwer (until 15 June
2023) 375,0001 425,000 425,000 425,000 425,000 -12% 0% 0%
Karin Kersten 375,0002 187,815 – – – 99.6% – –
Aminur Rashid 189,3053 220,032 177,515 172,347 167,328 2.3% 3% 3%
Non-Executive Directors: (GBP)
Guy Dawson 75,000 70,000 70,000 60,000 60,000 7% 0% 17%
Gavin Laws 65,0004 60,000 60,000 60,000 60,000 8% 0% 0%
Chris Low 65,0005 – – – – 0% – –
Hanny Kemna 65,000 60,000 60,000 50,000 50,000 8% 0% 0%
Salehuddin Ahmed 55,0006 50,000 50,000 50,000 – 10% 0% 0%
Average salary per staff
(all ASAI staff excl. Executive
Directors) (USD) 4,358 4,274 3,665 3,440 3,099 2% 2% 17%
Earnings growth –
ASAIG consolidated -71.9% 181% 556% -104% 6.0%
1 Dirk Brouwer’s salary was amended to reported amount as of 15 June 2023, when he stepped into a new role.
2 Karin Kersten’s salary increased as per her appointment on 15 June 2023. Her salary is in Euro’s.
3 The salary includes festival bonus and allowances. 2022 salary includes a USD 35,000 one-off cash compensation. The one-off
compensation is not relected in the % change.
4 GBP 65K until 15 June 2023.
5 GBP 65K as of 15 June (between 1.2.2023 – 15 June 2023 GBP 55K)
6 GBP 65K as of 1.1.2023 until 8 December 2023 and after 8.12.2023 GBP 55K. Excess Paid: £672.04
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4. Remuneration Policy
This section is the Remuneration Policy approved
by the shareholders at the 2023 AGM.
4.1 Review and implementation of policy
The policy is developed and reviewed by the
Remuneration Committee of the Board of Directors
(the ‘Committee’).
Conflicts of interests are managed by ensuring
that the Committee comprises only Independent
Non-Executive Directors and no Director is present
when their own remuneration is being discussed.
The Committee seeks assistance from independent
remuneration consultants as appropriate to provide
an external perspective and also seeks the view
of the Audit and Risk Committee and senior
management.
4.2 Policy table for Executive Directors
The adjacent table sets out all the components of
remuneration for the Executive Director from the
date of the AGM as approved in 2023, other than
recruitment packages. See also table in Para 5.3.
Policy Table – Executive Directors
Component and rationale Description
What is the maximum that may be paid in respect
of the component?
Basic salary
Helps to recruit and retain
high-calibre Directors.
The Committee reviews basic salary annually, taking account of performance
and market conditions. Basic salary will not normally be increased by more
than the annual increase in basic salary of employees of the group except
as described, in relation to new recruits, in paragraph 4.8.
Except upon promotion to a more senior
post or a material increase in his or her
responsibilities, or if the average annual
basic salary increase of Group employees
exceeds 10%, no Executive Director’s basic
salary may be increased by more than 10%
in any year.1
Benefits
Enables Directors to perform their
roles effectively by contributing
to their well-being and security.
Provides competitive benefits
consistent with the role.
Benefits are set by the Committee from time to time and currently include:
• Private medical cover.
• Life assurance cover.
• 13th month bonus equal to one month salary.
• Ex-patriate benefits offered in connection with recruitment.
• Reimbursement for reasonable expenses incurred in connection with
duties, including travel expenses and any tax payable on travel expenses.
The total cost of benefits will not be more
than £50,000 in aggregate per Director
but this may be exceeded if the cost of
providing insurance on the same basis
has increased from year to year.
Options
Aligns pay with longer-term
returns to shareholders.
Directors can be granted options under the ASA International Long-term
Incentive Plan (‘LTIP’). These are rights to acquire shares (or a cash equivalent)
at any time after vesting for an exercise price set at grant which is based on
the market value of a share at grant.
Options will normally vest in three instalments starting on the third
anniversary of grant (60%), and on the fourth and fifth anniversaries of grant
(20% each). No performance conditions or post-vesting holding periods apply.
Malus and clawback provisions apply as described below.
Options have a term of ten years and can only be exercised to the extent they
have vested.
Dividend equivalents are not payable.
The fair value of options (as used for
accounting purposes) granted to any one
Director in any one financial year must not
be more than 100% of their basic salary.
Pension
Helps to recruit and retain
high-calibre directors.
Directors are entitled to an employer contribution to a pension scheme
or a cash payment in lieu.
Payments in lieu of pension and employer
contributions to defined contribution
schemes are limited to 17% of each
member’s basic salary. This is equivalent
to the contribution rate for the majority
of the workforce.
1 Wording adopted at the 2023 AGM.
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4.3 Malus and clawback
The Committee can reduce the number of shares in respect of which an option vests or can be exercised
(including a reduction to zero) if:
• There has been an error in the calculation of the level of grant or vesting of any option or the amount
of any other variable remuneration paid to the Director.
• There has been a misstatement of the Company’s results for any year before vesting.
• A business unit or profit centre in which the Director worked has subsequently made a loss out of business
written in that year or from circumstances that could reasonably have been risk-managed.
• Information has emerged since the grant date relating to the relevant financial year which would have
affected the size of the option granted.
• The Committee determines in its absolute discretion that the underlying financial health of the Group
has significantly deteriorated such that there are severe financial constraints on the Group which preclude
or limit the Group’s ability to facilitate funding of options and the Director was directly or indirectly
(and either solely, or collectively) responsible for such deterioration.
• The Director has engaged in conduct which has had a material adverse effect on the financial position
of the Group, the member of the Group by which the Director was then employed or the business unit
in which he or she then worked, between the award date and vesting.
• There has been a failure of risk management for which the Director was directly or indirectly (and either
solely, or collectively) responsible.
• The Director has been guilty of fraud or gross misconduct or has brought any member of the Group
into disrepute.
Similarly, the Director can be required to give back some or all of the shares or cash received under the
option (or pay an amount equal to the value of shares) if, within three years of vesting, the Committee
becomes aware that there has been a misstatement of results for any year before vesting or the Director
has been guilty of fraud or gross misconduct or has brought the Group into disrepute.
44 Treatment of options on takeovers and other transactions
Options will generally vest early on a takeover. Alternatively, Directors may be allowed or required
to exchange their options for equivalent options over shares in the acquiring company.
Where an option vests in these circumstances, unless the Committee decides otherwise, the number
of shares in respect of which it can be exercised will be reduced to reflect the fact that it is vesting early.
The Committee can adjust the number or type of shares under an option and/or the exercise price to take
account of any rights issue or similar transaction, demerger, special dividend, variation of capital or other
event which it considers could have an impact on an option.
4.5 Non-Executive Directors
The table below sets out all the components of remuneration for Non-Executive Directors from the date
of the 2023 AGM, other than recruitment packages.
Policy table – Non-Executive Directors
Component and rationale Description
What is the maximum that may be paid in
respect of the component?
Fees
Attract and retain a Chairman
and Non-Executive Directors
who have the requisite skills
and experience to determine
the strategy of the Group and
oversee its implementation.
Directors’ fees are in principle
reviewed on an annual basis
(if not agreed otherwise by
the Committee).
Directors’ fees (including any
benefits) must not, in aggregate,
be more than the limit set out in
the Articles of Association of the
Company from time to time, which
is currently £2,500,000.
Expenses
Ensures the Directors are not
left out of pocket.
Reimbursement for reasonable
expenses incurred in connection
with duties, including travel
expenses and any tax payable
on travel expenses.
N/A
Non-Executive Directors do not receive options and do not participate in any pension or incentive
arrangements. As explained above, no shareholding requirements apply to Directors.
If a Non-Executive Director provides additional services to the Group, they may be paid for those services
on a basis agreed by the Board of Directors.
4.6 Relationship to remuneration paid to other employees
The remuneration package of Executive Directors is based on the same elements as those offered to other
employees of the Group but with a greater emphasis on variable pay and alignment with shareholders,
delivered through options. This reflects the Directors’ greater ability to influence corporate performance.
In formulating the policy, the Committee started by looking at remuneration packages offered to employees
across the Group and changed those where necessary to reflect the leadership role of Directors and the
international pool from which Directors are recruited.
The main remuneration comparison measurements which the Committee took into account when setting
remuneration policy for the Executive Directors at the time of the IPO was the benchmark reports prepared
by the independent consultant Willis Towers Watson in 2018 and salary levels and rewards across the
microfinance industry. In 2023 FIT consultants prepared a benchmark report in respect of NED salaries.
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4.7 Approach to recruitment
A new Executive Director’s remuneration should take
into account that Director’s level of the skills and
experience required for the role and may start off
lower than his or her predecessor’s remuneration
with a view to reaching a market rate over time,
subject to performance.
When recruiting a new Executive Director, the
starting point for negotiations would be the
components described in the table in paragraph 4.3.
However, if the Committee considers it is necessary
for the recruitment of a particular individual, it may
agree to components not contemplated in that table.
The maximum level of variable remuneration
(excluding compensatory awards described below)
for Executive Directors will not be more than 100%
of the recruit’s basic salary (with options valued
as described in the policy table).
A Director recruited to work outside their home
country may be offered relocation benefits including:
• Accommodation allowance.
• Education allowance.
• Two free air-tickets per year to and from home.
But these will not last more than two years from
starting employment.
The Committee may make compensatory awards in
the form of cash, shares or share awards/options in
the Company to compensate a new Executive Director
for benefits they will lose as a result of joining the
Company. Those awards would, so far as practicable:
• Reflect the value, at the time of grant, of the
awards being lost.
• Take the same form as the awards which are
being lost.
• Vest at the same time as the awards being lost.
• Be subject to comparable service and performance
conditions (though any performance conditions
may relate to the performance of the Company).
When recruiting a Non-Executive Director (including a chair), the remuneration offered would be consistent with the components described in the table
in paragraph 3.
4.8 Service contracts and letters of appointment
The Executive Director (CEO) has a service contract and the Non-Executive Directors have a letter of appointment, all of which are available for inspection
at the Company’s registered office. The CEO is not normally appointed for a fixed term but continue until her/his employment or office is terminated. Dirk Brouwer,
as Deputy Chairman and Special Advisor, is employed under indefinite employment contract.
Non-Executive Directors are appointed for an initial (and renewable) three-year term but are subject to annual re-election at the AGM.
4.9 Policy on notice periods and payments for loss of office
The Company’s policy is that:
• The CEO contract (and the employment contract of Dirk Brouwer, being Deputy Chairman and Special Advisor) requires a notice period of 6 months by the
employer (and 3 months for the employee).
• Non-Executive Directors’ letters of appointment require three months’ notice from either party but are terminated immediately if Director is not re-elected
at an AGM.
Each Directors’ contract or letter of appointment is consistent with this. For each component of pay, the amount paid to an Executive Director on termination
will be determined as follows:
Component Determination
Salary and benefits
The Director receives salary and benefits and pension (if any) benefits during their notice period.
The Company can decide to make a payment in lieu of notice equal to basic salary for the balance of the notice period and may decide to pay
this in instalments subject to reduction if the Director enters alternative employment before the end of the notice period.
Options
An option will normally lapse on leaving employment. Options which have already become exercisable may be exercised for up to 12 months
from the date of leaving after which they will lapse.
However, if the Executive Director dies or leaves because of disability, ill-health, injury, redundancy, retirement, sale of Company (or in other
circumstances if the Committee allows), the option will continue in effect and, unless the Committee decides otherwise, the number of shares
in respect of which it can vest and be exercised will be reduced pro rata to reflect the fact that the Director left early.
Alternatively, the Committee may allow the option to vest on leaving, or at some point thereafter, in which case (unless the Committee decides
otherwise) the number of shares in respect of which the option can be exercised will be reduced pro rata to reflect the fact that it is vesting
early. If the Executive Director dies, the option will vest on the date of death to the extent described above.
Other A departing Executive Director may also be paid some or all of the following on a reasonable basis to be determined by the Committee:
• Reasonable legal tax or outplacement expenses.
• Accrued holiday pay.
• Payments in compensation for non-compete restrictions.
• Relocation expenses.
• Amounts required to satisfy or settle any actual or potential legal claim by the Director against any Group company.
• Ex-gratia retirement gifts and presentations.
On termination, Non-Executive Directors are only entitled to any outstanding fees for the period worked, including their notice period, except Dirk Brouwer, who
receives a salary under his employment contract).
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4.10 Prior commitments
Where the Company has made a commitment to a Director to make a remuneration payment or payment for
loss of office before this policy came into effect or before the person became (but not in anticipation of their
becoming) a Director, the Company will honour the commitment, even if it is inconsistent with the
Remuneration Policy, which is in effect when the payment is to be made.
The existing Directors have the following entitlements pursuant to commitments made before this policy
came into effect:
• Karin Kersten was informed that she would be offered EUR 50,000 in stock options value at the time
she joined the Company on 1 October 2021, at which time she was not an Executive Director. 157,253
options were formally granted on 28 October 2022. On 3 July 2023 Karin Kersten (now CEO) was also
received an exceptional award of 125,088 share options under the LTIP.
4.11 Remuneration policy for key executives
The below constitutes the framework for the remuneration policy of the key executives both at the country
level and the head office level. The policy aims to:
• Attract, motivate and retain high-calibre employees across the Group.
• Reward employees fairly, according to their performance.
• Promote the achievement of the Group’s annual plans and its long-term strategic objectives.
• Align the interests of employees with those of all key stakeholders, in particular, our shareholders,
clients and regulators.
• Support effective risk management and promote a positive client conduct culture.
The Company will work closely with the Remuneration Committee to set the right policies and incentives
for the key executives both in the countries and at its head office.
On 18 July 2018, a number of the senior managers (including the then Executive Directors and Managing
Directors of the subsidiaries) who were instrumental in the creation of ASA International were awarded a
beneficial interest in a portion of the shares of the Company following the exercise of the 10% stock option
agreed by the Company pre-IPO. The combined economic interest in the proceeds of the sale of the shares
of the Company amount to 6.7% of the issued and outstanding share capital of the Company. (This interest
is indirectly held via Catalyst Continuity).
All key managers receive a fixed salary, and there is no cash bonus scheme other than the stock options
granted in 2022 (see below para 5.2). At present the Company believes a performance-based incentive
other than the LTIP does not fit the profile of the Company considering its key business of providing financial
services to low-income people.
5. Directors’ Remuneration Report 2023
This section of the report explains how the Group’s Remuneration Policy for Directors, approved at the AGM
in 2023, was applied during the year, and gives details of awards of options under the LTIP.
The report also summarises the fees paid to Directors in 2023 as well as the current shareholding of the
Chairman and the Executive Directors in the Company.
The Remuneration Policy was approved by 95,58% of the votes cast, with 4,42% against and 0 votes withheld,
at the AGM held on 15 June 2023. The Remuneration Report was approved by 95.59% of the votes cast, with
4,41% against and 0 votes withheld at the AGM held on 15 June 2023.
5.1 2023 Implementation of the Remuneration Policy
Prior to 2022 no awards were granted under the LTIP pending agreement on all relevant terms and conditions.
The 2022 operation of the LTIP was discussed and agreed in the Remuneration Committee held on 25 April
2022 and the first grants were made on 28 October 2022 in the case of employees and the Executive
Directors. The intended value of the option grants to the Executive Directors is set forth under options
in the table in Para 5.3.
On 28 October 2022, the Company granted options (‘Options’) over about 2,500,000 ordinary shares
of £0.01 each in the Company (‘Shares’) under its LTIP to certain Executive Directors and executives
at the Group and country level. As per 31 December 2023, the ASA International Group plc Employees
Benefit Trust has acquired 1,304,830 shares.
On 3 July 2023, the Company granted options (‘Options’) over 125,088 shares of £0.01 each in the Company
(‘Shares’) under its LTIP to Karin Kersten following her appointment as Chief Executive Officer.
The Committee approved a fee increase of GBP 5,000 for Non-Executive Directors with effect from 1 January
2023 considering that the basic fee of GBP 50K had not increased since 2018, which increases was supported
by a report of FIT Remuneration Consultants.
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5.2 A single figure table with audited Director pay data is shown below.
Name Position
Annual
salary/fee Benefits Bonus
Total
variable pay
(2022)
Total
variable pay
(2021)
Total
variable pay
(2020)
Total
fixed pay
(2022)
Total
fixed pay
(2021)
Total
fixed pay
(2020)
Karin Kersten Chief Executive
Officer1
EUR
361,363
Travel expenses
on actuals2 0 0 0 0
EUR
181,220 – –
Dirk Brouwer Deputy Chair and
Special Adviser4
USD
406,304
Travel expenses
on actuals5 0 0 0 0
USD
425,000
USD
425,000
USD
425,000
Aminur Rashid Executive Director
– Operations7
USD
187,505
Travel expenses
on actuals6 0 0 0 0
USD
220,032
USD
177,515
USD
172,347
Gavin Laws Non-Executive
Director3
GBP
30,038
Travel expenses
on actuals 0 0 0 0
GBP
60,000
GBP
60,000
GBP
60,000
Chris Low Non-Executive
Director3
GBP
55,743
Travel expenses
on actuals 0 0 0 0 – – –
Guy Dawson Non-Executive
Director3
GBP
75,000
Travel expenses
on actuals 0 0 0 0
GBP
70,000
GBP
70,000
GBP
70,000
Hanny Kemna Non-Executive
Director3
GBP
65,000
Travel expenses
on actuals 0 0 0 0
GBP
60,000
GBP
60,000
GBP
60,000
Salehuddin Ahmed Non-Executive
Director3
GBP
64,328
Travel expenses
on actuals 0 0 0 0
GBP
50,000
GBP
50,000
GBP
3,360
Note: a) No pension was provided to the Directors with the exception of Karin Kersten. b) All salaries are paid on a pro rata basis.
1 On 3 July 2023 (the ‘Grant Date’) the Group has granted options (‘Options’) over 125,088 ordinary shares of £0.01 each in the Company (‘Shares’) under its LTIP to Karin Kersten, the Chief Executive Officer of
the Company in connection with her appointment on 15 June 2023. The Options will normally vest, subject to continued employment, on the following schedule: 60% on the third anniversary and 20% on each
of the fourth and fifth anniversaries of the Grant Date. To the extent they vest, the Options are exercisable at a price of 84 pence per ordinary share, being the average share price for the three business days before
the Grant Date.
2 Karin Kersten is enrolled in the Company’s pension plan.
3 No bonuses are paid to Non-Executive Directors under the policy and no long term incentives vested.
4 Dirk Brouwer was the Chief Executive officer till the AGM on 15 June 2023, after which he became Deputy Chair and Special Adviser.
5 Dirk Brouwer is not enrolled in the Company’s pension plan.
6 Annual increase as per policy for Dhaka based staff, festival bonus and allowances. A 13th month salary was received.
7 Aminur Rashid retired from his role as of 30 June 2023.
Mr. Dawson was paid an annual fee of £55,000 plus an additional fee of £10,000 for the role of Chairman and £10,000 for chairing the Nomination Committee.
Other Non-Executive Directors were paid an annual fee of GBP 55,000 plus an additional GBP 10,000 for chairing a committee. The Committee approved a fee
increase of GBP 5,000 for Non-Executive Directors with effect from 1 January 2023 considering that the basic fee of GBP 50,000 had not increased since 2018,
which increase was supported by a report of FIT Remuneration Consultants.
5.3 Share Options granted in 2023 to Executive
Directors
On 3 July 2023 the Company granted options
(‘Options’) over 125,088 ordinary shares of £0.01
each in the Company (‘Shares’) under its LTIP to Karin
Kersten upon her appointment as Chief Executive.
The number of shares granted was a Board decision.
The Options will normally vest, subject to continued
employment, on the following schedule:
• 60% on the third anniversary and 20% on each
of the fourth and fifth anniversaries of the
Grant Date.
To the extent they vest, the Options are exercisable
at a price of 84 pence per ordinary share, being
the average share price for the three business
days before the Grant Date. Options do not attract
dividend equivalents. The face value of the option
is 105,074 based on the price of 84 pence per
ordinary share.
In April 2022 the Employee Benefit Trust (‘EBT’)
that is entitled to hold the shares in relation to
the LTIP was established. The EBT is managed by
an independent Trustee. The EBT has acquired
1,304,830 shares of the Company by the end of
2023 to hold in reserve for employees who choose
to exercise their option rights under the LTIP.
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Malus and clawback provisions only apply to options, and no component of remuneration is dependent on
performance measures or targets (save for value being linked to share price increase, in relation to options).
The Company does not have any in-employment or post-employment shareholding requirements for its
Directors, as the Company believes the nature of its LTIP, being a market-value option plan, provides sufficient
long-term exposure for the Executive Directors to share price and long-term shareholder alignment.
The Company has selected a total vesting period of five years (with options normally vesting in instalments
between years three and five) as the appropriate vesting period, as the Company believes that a phased,
long-term vesting period (without any additional holding period) is warranted given the growth stage
of the Company and the fact the market-value structure of the option plan means the options’ value
depend on sustained share price growth. Directors do not receive any incentives (bonus or LTIP) subject
to performance conditions.
Unvested awards will normally lapse on the date of leaving (‘bad leaver situation’) unless ‘good leaver’
treatment is applied. ‘Good leaver’ treatment normally means to remain capable of vesting on the normal
vesting date, subject to performance achievement and pro rata for time. Directors can confer ‘good leaver’
treatment on any leaver within 30 days of leaving. Directors can reduce vesting and/or impose additional
conditions on exercise where they do so. See also table in Para 4.10 above.
5.4 Other disclosures
Relative importance of spend on pay (USD ‘000s)
Employees’
remuneration
Expenditure on
other measurements
60,671
60,475
7,656
12,620
0
10,000
20,000
30,000
40,000
50,000
70,000
60,000
In USD
Note: No dividend was declared in 2022 and 2023, so the distribution
to shareholders is nil.
2023
2022
Historical TSR performance (GBP ‘000s)
IPO date
Note: TSR calculation is assuming a hypothetical 100 GBP investment in
ASA International ordinary shares and in the FTSE 250 index at 13 July 2018, plus
dividend reinvestment at the time of dividend payment.
YE 2018 YE 2019 YE 2020 YE 2021 YE 2022
YE 2023
ASAI
FTSE 250
0
20,000
40,000
60,000
80,000
100,000
140,000
120,000
In GBP
CEO annual salary and long term
incentives (USD) 2023 2022 2021 2020 2019 2018
Annual salary 375,0001 425,000 425,000 425,000 425,000 425,000
Note: No bonuses were paid in previous years and long term incentives have not vested in any year so far, with the earliest vesting date
commencing in 2025.
1 Paid in Euros.
6. Directors’ shareholdings
The shareholdings of Directors in the Company as of 31 December 2023 are shown below.
Name of Director
Number of
shares % holding
Dirk Brouwer
1,2,3
19,319,999 19.3%
Karin Kersten
4
110,000 0.1%
1 Reflects the Company’s share capital held in the form of indirect beneficial holdings of shares through an indirect holding in Catalyst
Continuity. The votes attaching to the shares held by Catalyst Continuity are ultimately controlled a company ultimately controlled by Dirk
Brouwer). Decisions taken by this company, including decisions as to the voting of the relevant shares, are made by the Board of Directors
thereof (i.e. Dirk Brouwer).
2 Dirk Brouwer holds his interest in the Company via CMIMC which in turn holds its interest in the Company via Catalyst Microfinance
Investors 29.2% and Catalyst Continuity 17.1%. Catalyst Microfinance Investors and Catalyst Continuity own 46.3% in total, each company
(ultimately) controlled by Dirk Brouwer.
3 Dirk Brouwer was granted options over 282,341 shares in 28 October 2022 at the price of 93 pence per share.
4 Karin Kersten, Chief Executive Officer, has purchased in aggregate 110,000 ordinary shares over 27 and 28 November 2023. On 3 July 2023
the Company granted options over 125,088 ordinary shares of £0.01 each in the Company under its LTIP to Karin Kersten upon her
appointment as Chief Executive. To the extent they vest, the Options are exercisable at a price of 84 pence per ordinary share. On
28 October 2022, the Company granted options over 157,253 ordinary shares to Karin Kersten, as an Executive Director and Person
Discharging Managerial Responsibilities. To the extent they vest, the Options granted in 2022 are exercisable at a price of 93 pence per
ordinary share, being the average share price for the three business days before the Grant Date. More details on the options granted in 2023
can be found on page 94.
Directors and employees of the Group are required to comply with applicable legislation relating to dealing
in the Company’s shares as well as the Company’s share dealing rules.
As disclosed previously (including at the time of the Company’s listing), certain (direct and indirect)
shareholders in the Company are taken to constitute a ‘concert party’ for the purposes of the Takeover Code.
Those shareholders include Dirk Brouwer and the entities through which he indirectly holds his interests in
the Company, including Catalyst Microfinance Investors (‘CMI’) and Catalyst Continuity (‘Catalyst Continuity’).
CMI and Catalyst Continuity are ultimately controlled by Dirk Brouwer through CMIMC, a holding company
of the founders of CMI.
A consequence of the current aggregate shareholding of the Concert Party being 46,328,944 shares is that any
increase in that aggregate shareholding (which could result from, among other things, any exercise of the Options
granted to Dirk Brouwer), may result in a requirement under Rule 9 of the Takeover Code for the Concert Party to
make a mandatory offer for the remainder of the share capital of the Company not already held by it. Therefore, in
2023 the Independent Directors, being all of the directors of the Company who are not members of the Concert
Party, sought and obtained a waiver from the Takeover Panel in respect of any requirement for the Concert Party
to make such a mandatory offer under Rule 9 of the Takeover Code. The terms of this waiver were subsequently
approved by the independent shareholders of the Company at the 2023 AGM.
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Remuneration Committee report continued
7. Service contracts and letters of appointment
Details of Directors’ pay are stated in the table at
section 5.2 above. No Director has been involved
in deciding his or her own remuneration.
Karin Kersten – Chief Executive Officer
Ms Kersten is employed through a service agreement
dated 15 June 2023. Her salary is EUR 375,000 and
she was awarded 125,088 additional share options
after the 2023 AGM. Ms Kersten’s service agreement
is terminable by either party with six months’ notice,
or earlier upon conclusion of a termination
agreement and Karin Kersten will observe a notice
period of three months. The Company will consider
making a payment under any such agreement on a
case-by-case basis, taking account of the contractual
terms, the circumstances of the termination and any
applicable duty to mitigate.
Dirk Brouwer – Deputy Chairman and Special
Advisor
Mr Brouwer is employed through an employment
agreement dated 15 June 2023. His salary is USD
375,000. Mr Brouwer’s employment agreement
is terminable in accordance with Dutch Law.
The Company shall observe a notice period of six
months and Mr Brouwer will observe a notice period
of three months. The Company will consider making
a payment under any such agreement on a case-by-
case basis, taking account of the contractual terms,
the circumstances of the termination and any
applicable duty to mitigate. In his role as (i) Deputy
Chairman of the Board and (ii) Special Adviser to the
new CEO, the Executive Committee and the broader
management team, Mr Brouwer only receives a
regular, annual salary for his services to the Company
and no Board and Director fees or any other
emoluments.
Guy Dawson – Non-Executive Director
Mr Dawson is the Non-Executive Chairman and a
Non-Executive Director engaged through a letter of
appointment dated 28 June 2018 and was appointed
as Non-Executive Chairman on 1 January 2021. He is
the Chairman of the Nomination Committee (and the
Independent Committee). His fee as a Non-Executive
Director and Non-Executive Chairman is GBP 75,000
per annum (including a GBP 10,000 fee for chairing
the Board and a GBP 10,000 fee for chairing the
Nomination Committee) and his engagement with
the Company can be terminated with three
months’ notice.
Hanny Kemna – Non-Executive Director
Ms Kemna is a Non-Executive Director engaged
through a letter of appointment dated 28 June
2018. She is the chairperson of the Remuneration
Committee, and a member of the Audit and Risk
Committees (and the Independent Committee).
Her fee as a Non-Executive Director, Chairperson
of Remuneration Committee and Senior Independent
Director is GBP 65,000 per annum (the fee of GBP
10,000 fee also included the remuneration for acting
as the Senior Independent Director as of 1 January
2020) and her engagement with the Company can
be terminated with three months’ notice.
Salehuddin Ahmed – Non-Executive Director
Dr Ahmed is a Non-Executive Director engaged
through a letter of appointment dated 7 December
2020. He is a member of the Nomination and
Audit and Risk Committees (and the Independent
Committee). His fee as a Non-Executive Director
is GBP 55,000 per annum and his engagement with
the Company can be terminated with three months’
notice. His term expires on 7 December 2024
by virtue of the letter of extension dated
7 December 2023.
Chris Low – Non-executive Director
Mr Low is a Non-Executive Director engaged
through a letter of appointment dated 12 December
2022. His appointment took effect on 1 February
2023. He is a member of the Remuneration, Audit
and Risk and Independent Directors Committees.
His fee as a Non-Executive Director is GBP 65,000
per annum (including a GBP 10,000 fee for chairing
the Audit and Risk Committee) and his engagement
with the Company can be terminated with three
months’ notice.
Non-Executive Directors
Prior to January 2023, Mr. Dawson was paid an
annual fee of GBP 50,000 plus an additional fee
of GBP 10,000 for the role of Chairman and
GBP 10,000 for chairing the Nomination Committee.
Other Non-Executive Directors were paid an annual
fee of GBP 50,000 plus an additional GBP 10,000
for chairing a committee and GBP 10,000 for the
role of senior Independent Non-Executive Director.
The Executive Directors approved a fee increase
of GBP 5,000 for Non-Executive Directors with
effect from 1 January 2023, considering that the
basic fee of GBP 50,000 had not increased since
2018, which increase was supported by a report
by the independent advisors FIT Remuneration
Consultants.
Guy Dawson, Gavin Laws and Dirk Brouwer were
already on the Board of ASA International Holding
prior to the establishment of ASA International
Group plc in May 2018. In view of the listing
on 13 July 2018, Ms Kemna had been identified
as a potential candidate through well-established
contacts in the financial industry including the
Company’s network of advisers. Dr Ahmed was
identified through the network of Mr Shafiqual
Haque Choudhury (ASA former Chairman)
in Bangladesh and Mr Low was identified through
a search carried out with the help of the independent
search consultants Ridgeway Partners.
Annual Salary Executive Director
(as at 31 December 2023) EUR
Karin Kersten 375,000
Consideration of shareholders’ views
The Chairman of the Board is available to be
consulted by our major shareholders on key issues
including remuneration at any time. The Board
does its best to ensure that there is a satisfactory
dialogue with shareholders, on mutual understanding
of objectives.
Committee Effectiveness
The 2023 evaluation of the Committee’s
effectiveness indicated that it remained satisfactory,
and the Committee was properly consulted on the
remuneration implications of Executive Director and
other senior management changes, with full briefings
provided including independent peer group pay
comparisons. In 2024, the Committee looks forward
to discussing management’s proposals for updated
HR policies and a more structured system of staff
performance evaluation.
This report was approved by the Board of Directors
on 26 April 2024 and signed on its behalf by:
Hanny Kemna
Chairman of the Remuneration Committee
26 April 2024
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Independent Directors’ Committee report
The Independent Directors’ Committee identifies
and manages matters involving conflicts of interest
(including potential conflicts of interest) between any
Group company, on the one hand, and any controlling
shareholder or related party (each as defined under
the Listing Rules), on the other hand. It is also
responsible for overseeing and scrutinising the
relationship between the Group, its related parties
and its controlling shareholders (including evaluating,
monitoring and approving any material transactions
or arrangements between such parties and generally
monitoring compliance with the Relationship
Agreement (see page 73).
In 2023, the Independent Committee discussed
amongst other things succession planning, the hiring
of a qualified internal auditor, as well as the potential
appointment of a new Non- Executive Director
in 2024.
The Independent Directors’ Committee comprises
all of the Independent Non-Executive Directors,
being Salehuddin Ahmed, Guy Dawson, Hanny
Kemna and Chris Low. It was chaired by Guy Dawson
in 2023 and met four times.
Disclosure Committee report
The Disclosure Committee is chaired by the CEO
and also includes the CFO and the General Counsel.
It meets as required in order to assist the decisions
of the Board concerning the identification of inside
information and to make recommendations about
how and when that information should be disclosed
in accordance with the Company’s disclosure
procedures manual. Its primary duty is to ensure that
inside information is properly disclosed in accordance
with the requirements of the Market Abuse Regulation.
The Disclosure Committee had conference calls
and meetings through the year in 2023 to assess
developments in the Company and concluded on
each occasion that there was no matter which could
be considered as inside information or thought to be
capable of becoming inside information. There have
been no material changes in the interests held by
Directors or key managers since the listing of the
Company on 13 July 2018 other than indirect
shareholdings held by Dirk Brouwer and the nominee
of the late Md Shafiqual Haque Choudhury.
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Directors’ report
The Directors of the Company present their report
for the year ended 31 December 2023. The Company
is a public limited company, incorporated in England
and Wales with the registered number 11361159
and with its registered office situated at Highdown
House, Yeoman Way, Worthing, West Sussex BN99
3HH, United Kingdom.
The Strategic Report, set out on pages 01 to 67 of this
Annual Report, and Corporate governance report,
Committee reports and the Directors’ Remuneration
Report, set out on pages 68 to 100 of this Annual
Report, include information that would otherwise
need to be included in this Directors’ report. Relevant
items are referred to below and incorporated by
reference into this report.
Results and dividends
The consolidated results for the year are shown on
page 110 of the financial statements. The profit
before tax of the Company was USD 32.2m, as
against USD 46.3m for the previous year.
The Directors have decided not to declare dividend
in 2024 on the 2023 results.
Company or any associated company, (ii) to pay
a fine imposed in criminal proceedings, (iii) to pay
a sum payable to a regulatory authority by way of
a penalty in respect of non-compliance with any
requirement of a regulatory nature (however arising),
(iv) in defending any criminal proceedings in which
they are convicted, where such conviction is final,
(v) in defending any civil proceedings brought by
the Company or an associated company in which
judgement is given against him or her, where such
judgement is final, or (vi) in connection with any
application for relief under the provisions referred
to in section 234(6) of the Companies Act, where
the court refuses to grant the Director relief,
and such refusal is final.
Furthermore, the third-party indemnity shall
not apply:
(i) To the extent that it is not permitted by,
or consistent with, law or statute from time
to time in force, the Articles of Association
of the Company or the rules and regulations
of any regulatory body;
(ii) To the extent that the Director has been,
or is entitled to be, indemnified or reimbursed
by any Directors’ or Officers’ liability insurance
or any other insurance;
(iii) Where there has been gross negligence,
fraud or wilful default by the Director; nor
(iv) Where the Director has improperly derived
a personal benefit or profit.
Qualifying third-party indemnity provisions for the
purposes of section 234 of the Companies Act 2006
were accordingly in force during the course of the
year, and remain in force at the date of this report.
The Company also maintains liability insurance for
its Directors and Officers.
Share capital
The share capital of the Company as of 31 December
2023 consists of 100,000,000 ordinary shares of
GBP 0.01 each.
Directors
The names of the Directors of the Company at
the date of this report, together with biographical
details, are given on page 69 of this Annual Report.
All of them served throughout the 2023 financial
year except for Chris Low, who joined the Board
in February 2023. In accordance with the UK
Corporate Governance Code, all Directors will retire
at the 2024 Annual General Meeting (‘AGM’) and,
will offer themselves for re-election at that meeting.
Further details on the Directors’ remuneration
and service contracts or appointment letters
(as applicable) can be found in the Directors’
Remuneration Report on pages 87 to 96 of
this Annual Report.
Directors’ interests
The Directors’ interests in the share capital of the
Company as at 31 December 2023 are set out on
page 95 of the Directors’ Remuneration Report.
Powers and appointment of Directors
The Company’s Articles of Association set out
the powers of the Directors, and rules governing
their appointment and removal. The Articles of
Association can be viewed at the registered office
of the Company. Further details on the powers,
appointment and removal of Directors are set out
in the Corporate governance report on page 96
of this Annual Report.
Directors’ indemnities and insurance
In accordance with its Articles of Association, the
Company has granted an indemnity to each of its
Directors on terms consistent with the applicable
statutory provisions. This indemnifies the Director in
respect of (a) any liability incurred by or attaching to
Directors in connection with any negligence, default,
breach of duty or breach of trust by the Director in
relation to the Company or any associated company,
or (b) in the actual or purported execution and/or
discharge of the Director’s duties and/or the actual
or purported exercise of the Director’s powers and/
or otherwise in relation to, or in connection with, the
Director’s duties, powers or office as an employee,
officer, trustee or agent of the Company and/or any
associated company other than any liability (i) to the
Under section 551 of the Companies Act 2006,
the Directors may allot equity securities only with
the express authorisation of shareholders which
may be given in general meeting, but which cannot
last more than five years. Under section 561 of the
Companies Act, the Board may not allot shares for
cash (otherwise than pursuant to an employee share
scheme) without first making an offer to existing
shareholders to allot such shares to them on the
same or more favourable terms in proportion to their
respective shareholdings, unless this requirement
is waived by a special resolution of the shareholders.
Rights attaching to shares
The Company’s Articles of Association set out the
rights and obligations attaching to the Company’s
ordinary shares. All of the ordinary shares rank
equally in all respects.
At general meetings of the Company, on a show
of hands, each member has the right to one vote.
In a poll, each member is entitled to one vote for
every share held.
The shares carry no rights to fixed income. No person
has any special rights of control over the Company’s
share capital and all shares are fully paid.
The Articles of Association and applicable legislation
provide that the Company can decide to restrict
the rights attaching to ordinary shares in certain
circumstances (such as the right to attend or vote
at a shareholders’ meeting), including where a
person has failed to comply with a notice issued
by the Company under section 793 of the Companies
Act 2006.
Deadline for exercising voting rights at AGM
Full details of the deadlines for exercising voting
rights in respect of the resolutions to be considered
at the AGM, to be held on 20 June 2024, will be set
out in the Notice of AGM.
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Restrictions on the transfer of shares
There are no specific restrictions on the transfer
of the Company’s shares, which are governed by
the general provisions of the Articles of Association
and prevailing legislation. The Articles of Association
set out certain circumstances in which the Directors
of the Company can refuse to register a transfer
of ordinary shares.
Directors and employees of the Group are required
to comply with applicable legislation relating to
dealing in the Company’s shares as well as the
Company’s share dealing rules. These rules restrict
employees’ and Directors’ ability to deal in ordinary
shares at certain times, and require the employee
or Director to obtain permission prior to dealing.
The Directors holding shares are in compliance
with the provision of the share dealing rules.
The Company is not aware of any arrangements
between its shareholders that may result in
restrictions on the transfer of shares and/or
voting rights.
Employee Long-Term Incentive Plan
The Company has adopted a Long-Term Incentive
Plan (the ‘Plan’). In 2022, share options were granted
to the Executive Directors and certain senior
executives of the Company and also its subsidiaries
as selected by the Remuneration Committee of the
Board, but the Plan gives flexibility for the Company
to grant a range of awards to take account of local
legal and tax requirements and changing policy.
In the case of Directors this will be subject to the
current Directors’ Remuneration Policy.
The Company made awards under the Plan on
October 28, 2022 being within 42 days of September
20, 2022 in respect of employees and Executive
Directors. In any ten-year period, not more than 10%
of the issued ordinary share capital of the Company
may be issued or be issuable under the Plan and
all other employee share plans operated by the
Company. The Company made an additional award
under the Plan on July 3, 2023 being within 42 days
of 20 June 2023).
In preparing these financial statements the Directors
are required to:
• Select suitable accounting policies in accordance
with IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors and then apply
them consistently.
• Make judgements and accounting estimates that
are reasonable and prudent.
• Present information, including accounting policies,
in a manner that provides relevant, reliable,
comparable and understandable information.
• Provide additional disclosures when compliance
with the specific requirements in IFRSs is
insufficient to enable users to understand the
impact of particular transactions, other events
and conditions on the Group and Company
financial position and financial performance.
• In respect of the Group financial statements, state
whether UK adopted international accounting
standards have been followed, subject to any
material departures disclosed and explained
in the financial statements.
• In respect of the Parent Company financial
statements, state whether UK adopted
international accounting standards, have been
followed, subject to any material departures
disclosed and explained in the financial
statements.
• Prepare the financial statements on the going
concern basis unless it is appropriate to presume
that the Company and/ or the Group will not
continue in business.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Company’s and Group’s transactions
and disclose with reasonable accuracy at any time
the financial position of the Company and the group
and enable them to ensure that the Company and
the Group financial statements comply with the
Companies Act 2006. They are also responsible for
safeguarding the assets of the Group and Parent
Company and group and hence for taking reasonable
steps for the prevention and detection of fraud and
other irregularities.
Substantial shareholdings
Details of substantial shareholdings in the Company
are set out in the Corporate governance report
on page 78 of this Annual Report.
Articles of Association
The Company’s Articles of Association were
last amended in June 2022. They may only be
amended by a special resolution of the Company’s
shareholders. The Articles of Association can
be viewed on request to the Company Secretary
at the registered office of the Company.
Going concern
As disclosed in note 2.1.1 of the financial statements,
the Directors have concluded that a material
uncertainty exists that may cast significant doubt
over the Group’s ability to continue as a going
concern due to breaches of loan covenants.
However, none of our lenders have called in their
debts in the past three years. Having assessed the
projections, downtrend analysis and mitigations,
senior management and the Directors have a
reasonable expectation that the Group has adequate
resources to continue in operational existence
for the next 13 months from the date of approval
of these consolidated financial statements, and
through to 31 May 2025.
Directors’ responsibility statement
The Directors are responsible for preparing the annual
report and the financial statements in accordance
with applicable United Kingdom law and regulations.
Company law requires the Directors to prepare
financial statements for each financial year. Under
that law the Directors have elected to prepare
the Group and Parent Company financial statements
in accordance with UK adopted international
accounting standards. Under company law the
Directors must not approve the financial statements
unless they are satisfied that they give a true and
fair view of the state of affairs of the Group and
the Company and of the profit or loss of the Group
and the Company for that period.
Under applicable law and regulations, the Directors
are also responsible for preparing a Strategic Report,
Directors’ report, Directors’ Remuneration report
and Corporate Governance statement that comply
with that law and those regulations. The Directors
are responsible for the maintenance and integrity
of the corporate and financial information included
on the Company’s website.
Directors’ responsibility statement (DTR 4.1)
The Directors confirm, to the best of their
knowledge:
• That the consolidated financial statements,
prepared in accordance with UK adopted
international accounting standards, give a true
and fair view of the assets, liabilities, financial
position and profit of the Parent Company
and undertakings included in the consolidation
taken as a whole.
• That the Annual Report, including the strategic
report, includes a fair review of the development
and performance of the business and the position
of the Company and undertakings included
in the consolidation taken as a whole, together
with a description of the principal risks and
uncertainties that they face.
• That they consider the Annual Report, taken
as a whole, is fair, balanced and understandable
and provides the information necessary for
shareholders to assess the Company’s position,
performance, business model and strategy.
Guy Dawson
Chairman
26 April 2024
Karin Kersten
Chief Executive Officer
26 April 2024
Directors’ report continued
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Directors’ report continued
Corporate Governance Statement
The Company is required by the Disclosure and
Transparency Rules and Guidance to prepare
a Corporate Governance Statement including
certain specified information. Information fulfilling
the requirements of the Corporate Governance
Statement can be found in this Directors’ report and
the Corporate governance report, Committee reports
and Directors’ Remuneration Report on pages
68 to 100 of this Annual Report. This information is
incorporated by reference into this Directors’ report.
The Company has complied throughout the year 2023
with all provisions of the UK Corporate Governance Code.
Strategic Report
The Company’s Strategic Report can be found
on pages 01 to 67 of this Annual Report.
Business activities
The Group’s business activities, together with
a description of future developments (including
the factors likely to affect future development and
performance) and its summarised financial position,
are set out in the Strategic Report.
Information on the Company’s employment practices
(including with respect to employee involvement)
and greenhouse gas emissions is set out on pages 64
and 65 and in the Non-financial and sustainability
information statement on pages 66 and 67 of the
Strategic Report.
Significant agreements affected by a change of control
A change of control of the Company, following
a takeover bid, may cause a number of agreements
to which the Company is party to take effect, alter
or terminate. These include certain credit facility
agreements which include change of control clauses.
Financial instruments
Details of the Group’s financial instruments can
be found in note 2.2.2 to the financial statements.
The notes begin on page 114.
Financial risk management
The Group has procedures in place to identify, monitor and evaluate the significant risks it faces. The Group’s
risk management objectives and policies are described on pages 37 and 38, and the risks associated with the
Group’s financial instruments are analysed in note 2.2.2 on pages 117 and 118 of the financial statements.
Post-balance sheet events
As per 1 April 2024 ASAI NV acquired the outstanding principal debt and interest receivable totaling
USD 4.4 million held by ASA Myanmar from various international lenders managed by Symbiotics and
Frankfurt School Financial Services. The company had already made an advance payment for this assignment
of USD 955K in 2023 (note 18.3).
On 25 February 2024, ASAI reached a key milestone, by migrating all clients in Pakistan from our incumbent
loan system to the Temenos Transact Core Banking System. This migration enables ASA Pakistan to start
taking deposits and to grow their client base in a highly regulated environment.
Political donations
No political donations were made during the year.
Disclosure of information under Listing Rule 9.8.4CR
As required by Listing Rule 9.8.4CR, the table below sets out the location of information required to be
disclosed under Listing Rule 9.8.4 R:
Listing Rule
sub‑section Item Location
9.8.4 (4) Details of any long-term incentive schemes
as required by LR 9.4.3 R
Remuneration Report on pages 93 to 96
9.8.4 (5)-(6) Details of any waiver of emoluments
by a Director
Remuneration Report on page 94
9.8.4 (10) Details of any contract of significance
to which the Company or a subsidiary
is a party and in which a Director or a
controlling shareholder is materially
interested
ASA NGO Bangladesh and AMSL (a wholly
indirectly owned subsidiary of the Company)
entered into a lease agreement and a services
agreement (for the lease of office spaces
and related services) in 2020
9.8.4 (11) Details of any contract for the provision of
services to the Company or a subsidiary by
a controlling shareholder, subsisting during
the period under review, unless the services
are part of the shareholder’s main business
None
9.8.4 (14) Statement that the Relationship Agreement
between the Company and the controlling
shareholder has been complied with
throughout the year
Corporate governance report on page 73
Resolutions at the 2024 AGM
The Company’s AGM will be held on 20 June 2024. Resolutions to be proposed at the AGM include the
election of the Directors and the reappointment of Ernst & Young (‘EY’) as the auditor of the Group.
The full text of each of the resolutions to be
proposed at the 2024 AGM will be set out in the
Notice of AGM sent to the Company’s shareholders.
A letter from the Chairman and explanatory notes
will accompany the Notice of AGM.
Auditor
The Board (following a recommendation from the
Audit and Risk Committee) has recommended that
EY be reappointed as the Group’s auditor at the
2024 AGM, at which resolutions concerning EY’s
reappointment and authorising the Directors to set
its remuneration will be proposed. The full text of
the relevant resolutions will be set out in the Notice
of AGM sent to the Company’s shareholders.
Disclosure of information to the auditor
Each of the persons who are Directors at the date
of approval of this Annual Report confirms that:
• So far as the Director is aware, there is no
relevant audit information of which the
Company’s auditor is unaware.
• They have taken all the steps that they ought
to have taken as a Director in order to make
themselves aware of any relevant audit
information and to establish that the Company’s
auditor is aware of that information.
This confirmation is given and should be interpreted
in accordance with the provisions of section 418
of the Companies Act 2006.
By order of the Board
Prism Cosec
Company Secretary
26 April 2024
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Registration:
ASA International Group plc is a company registered in England and Wales.
Registered number: 11361159
Company secretary:
Prism Cosec Limited
Elder House, St Georges Business Park
207 Brooklands Road, Weybridge, Surrey KT13 0TS
United Kingdom
Registered office:
Highdown House, Yeoman Way
Worthing, West Sussex BN99 3HH
United Kingdom
Office addresses:
ASA Tower, 10th Floor 23/3,
Bir Uttam A.N.M. Nuruzzaman Sarak, Shyamoli,
Dhaka-1207, Bangladesh
Tel: +880 2 8119828, 8110934-35
Rembrandt Tower, 35th Floor, Amstelplein 1
1096 HA Amsterdam, The Netherlands
Tel: +31 20 846 3554
Website:
www.asa-international.com
Investor Relations:
Mischa Assink
Chief Accountant and Head of Investor Relations
ir@asa-international.com
Auditor:
Ernst & Young LLP
25 Churchill Place
Canary Wharf, London E14 5EY
United Kingdom
Financial Statements
General information
101 General information
102 Independent auditor’s report
110 Consolidated income statement and statement
of comprehensive income
111 Consolidated statement of financial position
112 Consolidated statement of changes in equity
113 Consolidated statement of cash flows
114 Notes to the consolidated financial statements
168 Statutory statement of profit or loss and other
comprehensive income
168 Statutory statement of financial position
169 Statutory statement of changes in equity
169 Statutory statement of cash flows
170 Notes to the statutory financial statements
Financial Statements
Directors Appointed on:
Guy Dawson 15 May 2018
Dirk Brouwer 15 May 2018
Johanna Kemna 28 June 2018
Dr. Salehuddin Ahmed 07 December 2020
Karin Kersten 25 April 2022
Chris Low 01 February 2023
Dirk Brouwer resigned from the position of
Chief Executive Officer (‘CEO’) on 15 June 2023
and stepped into new roles as (i) Deputy Chairperson
of the Board of ASA International and (ii) Special
Adviser to the new CEO, the Executive Committee
and the broader management team.
The Board appointed Karin Kersten as the CEO
of the Group as of 15 June 2023.
Gavin Laws (appointed on 28 June 2018)
resigned from the Board on 15 June 2023
after expiry of his term.
Aminur Rashid (appointed on 28 June 2018) took
an early retirement from the Group and resigned
from the Board on 30 June 2023.
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Independent auditor’s report to the
members of ASA International Group plc
Independence
We are independent of the Group and Parent Company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to
listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent
Company and we remain independent of the Group and the Parent Company in conducting the audit.
Emphasis of Matter – Material uncertainty related to Going Concern
We draw attention to note 2.1.1 in the financial statements, which indicates that the Directors have assessed
the elevated arrears and credit losses across the loan portfolio that have caused breaches in the Group’s
covenants on its borrowings in 2023. The current economic and market conditions across many of the
territories in which the Group operates makes it difficult to assess the potential for future debt covenant
breaches and whether the waivers necessary to avoid the immediate repayment of debt will be forthcoming.
As a result, the Directors have concluded that this represents a material uncertainty which may cast significant
doubt on the Group’s ability to continue as a going concern.
As stated in note 2, these events or conditions indicate that a material uncertainty exists that may cast
significant doubt on the Group and Parent Company’s ability to continue as a going concern. Our opinion
is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis
of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’
assessment of the Group and Parent Company’s ability to continue to adopt the going concern basis of
accounting included:
• In conjunction with our walkthrough of the Group’s financial close process, we confirmed our
understanding of the going concern assessment process and also engaged with management early
to ensure relevant key factors were considered in their assessment.
• We considered the period of the going concern assessment which is from the date of approval of these
financial statements to 31 May 2025 and confirmed this with those charged with governance.
• We agreed the Group’s borrowing analysis to supporting evidence, including satisfying ourselves that
there were no material intra-group liabilities in the form of parental guarantees or letters of support.
• We reviewed debt agreements across the Group in order to establish the existence of covenants and
considered the risk of covenant breaches on the timing of the Group’s debt repayment obligations.
• We established the accuracy and reasonableness of the budget and cashflow forecasts across the going
concern period under normal conditions and under a series of stress and severe stress scenarios, including
performing independent reverse stress testing. From this testing we considered the cash position in the
Group through to 31 May 2025 and compared that to the external debt in the Group, in order to establish
the level of risk associated with covenant breaches and the potential for debt being called due.
Opinion
In our opinion:
• ASA International Group plc’s Group financial statements and Parent Company financial statements (the
“financial statements”) give a true and fair view of the state of ASA International Group plc (the ‘Company’
or ‘Parent Company’) and its subsidiaries (together, the ‘Group’) affairs as at 31 December 2023 and of the
Group’s and the Parent Company’s profit for the year then ended;
• the financial statements have been properly prepared in accordance with UK adopted international
accounting standards; and
• the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
We have audited the financial statements of Group and Parent Company for the year ended 31 December
2023 which comprise:
Group Parent company
Consolidated income statement and statement of
comprehensive income for the year then ended
Statutory income statement and statement of other
comprehensive income for the year then ended
Consolidated statement of financial position as at 31
December 2023
Statutory statement of financial position as at 31
December 2023
Consolidated statement of changes in equity for the
year then ended
Statutory statement of changes in equity for the year
then ended
Consolidated statement of cash flows for the year
then ended
Statutory statement of cash flows for the year then
ended
Related notes 1 to 39 to the financial statements,
including a summary of significant accounting policies
Related notes 40 to 47 to the financial statements
including a summary of significant accounting policies
Information marked as ‘audited’ within the Directors’
Remuneration Report on page 94
The financial reporting framework that has been applied in their preparation is applicable law and UK adopted
international accounting standards.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. 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 believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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Overview of our audit approach
Audit scope
• We performed an audit of the complete financial information of thirteen components in
thirteen countries (full-scope) and audit procedures on specific balances on four
components in four countries (specific scope).
• The components where we performed full or specific audit procedures accounted for
98.8% of Profit before tax, 98.1% of Revenue and 98.9% of Total assets.
Key audit
matters
• Expected credit loss provisions
• Risk of fraud in revenue recognition through the incorrect recording of revenue arising
from fictitious loans and advances to customers
• Going concern
Materiality
• Overall group materiality of $2.1m (2022: $2.2m) which represents 5% of adjusted profit
before tax (2022: profit before tax).
An overview of the scope of the Parent Company and Group audits
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality
determine our audit scope for each company within the Group. Taken together, this enables us to form
an opinion on the consolidated financial statements. We take into account size, risk profile, the organisation
of the Group and effectiveness of group-wide controls, changes in the business environment, the potential
impact of climate change and other factors such as recent Internal Audit results when assessing the level
of work to be performed at each company.
In assessing the risk of material misstatement to the Group financial statements, and to ensure we had adequate
quantitative coverage of significant accounts in the financial statements, of the 28 reporting components of the
Group, we selected seventeen components covering entities within the following countries:
• Full scope (audit of complete financial information): Bangladesh, Pakistan, Philippines, India, Ghana,
Netherlands, Nigeria, Mauritius, Myanmar, Kenya, Tanzania, Uganda and the Parent Company in the
United Kingdom.
• Specific scope (audit of specific account balances or disclosures): Sierra Leone, Sri Lanka, Rwanda and Zambia.
We performed an audit of the complete financial information of thirteen components (“full scope
components”) which were selected based on their size or risk characteristics.
The reporting components where we performed audit procedures accounted for 98.8% (2022:98.8%) of the
Group’s Profit before tax, 98.7% (2022: 99.2%) of the Group’s Profit before tax when using absolute values,
98.1% (2021: 98.8%) of the Group’s Revenue and 98.9% (2022: 98.7%) of the Group’s Total assets. The full
scope components contributed 95.8% (2022: 108.4%) of the Group’s Profit before tax, 96.4% (2022: 85.4%)
of the Group’s Profit before tax when using absolute values, 92.5% (2022: 88.1%) of the Group’s Revenue and
95.5% (2022: 116.7%) of the Group’s Total assets.
• We reviewed the performance of the Group in 2023 and over recent history, including the historical impact
of the COVID-19 pandemic, global inflationary pressures, natural disasters or other significant events on
the business, in order to assess the historic resilience of the Group to periods of stress.
• We considered whether there were other events subsequent to the balance sheet date which could have
a bearing on the going concern conclusion, including engaging the views of the component audit teams,
reviewing loan arrears analysis and performing media searches relating to the impact of geo-political issues
and other relevant matters.
• We reviewed the Group’s going concern disclosures included in the Annual Report in order to assess
whether the disclosures were appropriate and in conformity with the accounting standards.
From our evaluation of the Directors’ going concern assessment, we had the following observations:
• As detailed in note 25, the Group had $268.5m of external debt at 31 December 2023 of which $23.0m
had breached loan covenants. The Group have obtained waivers from a number of lenders in order to
reduce the risk associated with debt being called due, but these waivers do not cover the complete period
through to 31 May 2025. We observed that, should a significant proportion of the debt be called due at
certain points in the going concern assessment period, the Group may have insufficient cash, at that time,
to fund the required repayments.
• The Group continues to face challenges in the collection of outstanding loan balances, particularly with
regard to operations in India, Nigeria, Myanmar, Sri Lanka, Rwanda and Sierra Leone. The recoverability of
customer loans may be impacted by current economic conditions, relating to inflationary pressures, which
could impact the Group’s ability to remain in compliance with covenants and settle debt when it becomes
due.
• The Group is experiencing restrictions on the movement of funds between certain countries, due to local
laws or regulations, which could restrict the ability of the Group to support the funding and debt
repayment requirements in the countries in which it operates.
Based on the work we have performed, we concur with the Directors that there are material uncertainties
relating to events or conditions that, individually or collectively, may cast significant doubt on the Group and
Parent Company’s ability to continue as a going concern. The assessment period was to 31 May 2025 and
considers at least twelve months from the date of the approval of these financial statements. Going concern
has been determined to be a key audit matter.
In relation to the Group and Parent Company’s reporting on how they have applied the UK Corporate
Governance Code, we have nothing material to add or draw attention to in relation to the Directors’ statement
in the financial statements about whether the directors considered it appropriate to adopt the going concern
basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the
relevant sections of this report. However, because not all future events or conditions can be predicted, this
statement is not a guarantee as to the group’s ability to continue as a going concern.
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This, together with the additional procedures performed at Group level, gave us appropriate evidence for our
opinion on the Group financial statements.
Climate change
Stakeholders are increasingly interested in how climate change will impact the Group and the micro-finance
industry. The Group has determined that the most significant future impacts from climate change on their
operations will be from the potential impact of natural disasters and weather events impacting the
recoverability of loans and advances to customers. These are explained on pages 58 to 63 in the required
Task Force On Climate Related Financial Disclosures and on pages 39 to 47 in the Principal Risks. All of these
disclosures form part of the “Other information”, rather than the audited financial statements. Our procedures
on these unaudited disclosures therefore consisted solely of considering whether they are materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise
appear to be materially misstated, in line with our responsibilities on “Other information”.
In planning and performing our audit we assessed the potential impacts of climate change on the Group’s
business and any consequential material impact on its financial statements.
The Group has explained in note 2.1.3 of the financial statements, how they have reflected the impact of
climate change in their financial statements. These disclosures also explain where governmental and societal
responses to climate change risks are still developing, and where the degree of certainty of these changes
means that they cannot be taken into account when determining asset and liability valuations under the
requirements of UK adopted international accounting standards. As noted in note 2.5.1(F), the Group has
identified the expected credit loss provision as one of the main areas in which it could be exposed to the
financial impacts of climate change risk as a number of the Group’s operating areas are prone to natural
disasters such as typhoons, flash floods or droughts.
Our audit effort in considering the impact of climate change on the financial statements was focused on
evaluating management’s assessment of the impact of climate risk, physical and transitional, the Group’s
climate related disclosures, the potential effects of material climate risks and the significant judgements and
estimates disclosed in note 2.1.3 and whether these have been appropriately reflected in asset values where
these are impacted by future cash flows, and in the timing and nature of liabilities recognised, following the
requirements of UK adopted international accounting standards. As part of this evaluation, we performed our
own risk assessment ,supported by our climate change internal specialists, to determine the risks of material
misstatement in the financial statements from climate change which needed to be considered in our audit.
We also challenged the Directors’ considerations of climate change risks in their assessment of going concern
and viability and associated disclosures. Where considerations of climate change were relevant to our
assessment of going concern, these are described above.
Based on our work we have not identified the impact of climate change on the financial statements to be a key
audit matter or to impact a key audit matter.
Of the remaining 11 components that together represent (1.2%) of the Group’s Profit before tax, none is
individually greater than 5% of the Group’s profit before tax. For these components, we performed other
procedures, including analytical review, testing of consolidation journals and intercompany eliminations and
foreign currency translation recalculations, to respond to any potential risks of material misstatement to the
Group financial statements.
Changes from the prior year
There is one component that was designated as specific scope for the 31 December 2022 audit which was
designated as full scope for the 31 December 2023 audit. Three components which were designated as
specified procedures (specific audit procedures as specified by the Primary Team) for the 31 December 2022,
were designated as full scope for the 31 December 2023 audit. Two components which were designated as
specified procedures for the 31 December 2022, were designated as specific scope for the 31 December
2023 audit. These changes were as a result of updated audit scoping from our consideration of component
significance and risk.
Involvement with component teams
In establishing our overall approach to the Group audit, we determined the type of work that needed to
be undertaken at each of the components by us, as the primary audit engagement team, or by component
auditors from other EY global network firms operating under our instruction. Of the thirteen full scope
components, audit procedures were performed on four of these directly by the primary audit team. For
the remaining nine full scope components, where the work was performed by component auditors, we
determined the appropriate level of involvement to enable us to determine that sufficient audit evidence
had been obtained as a basis for our opinion on the Group as a whole.
The Group audit team continued to follow a programme of planned visits and led a number of video
conference calls. The Senior Statutory Auditor and senior members of the Group audit team visited Kenya,
Tanzania, Pakistan, India, Netherlands, Bangladesh, Ghana, Nigeria, Sri Lanka and the Philippines. During these
visits we attended meetings with management, met borrower groups where possible, and held discussions
on the audit approach and any issues arising from the audit work with component teams. In addition to the
component visits, and for where visits were not undertaken, the Group audit team implemented a programme
of oversight and involvement which included the following activities:
• Issued detailed audit instructions;
• Held a group audit conference, including the primary team and all full-scope component teams, to
discuss the plan for the audit, including but not limited to; significant risk areas and other areas of focus,
independence procedures, materiality levels, updates from component territories, laws and regulations,
and going concern procedures;
• Held planning, execution and conclusion video conference meetings with components, including meetings
with component management where relevant, in order to direct and supervise the work performed
and conclude;
• Interacted regularly with component teams through each phase of the audit to supervise audit progress,
provide direction and validate the results and conclusions reached; and
• Reviewed component reporting documents and key working papers.
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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 and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts
of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters. In addition
to the matters set out below, we identified going concern as a key audit matter and have set out the procedures we conducted to address this and our conclusions above under the Emphasis of matter section.
Risk Our response to the risk
Key observations communicated to the Audit
and Risk Committee
Expected credit loss provisions (2023: $6.9m, 2022: $15.9m)
Refer to the Audit and Risk Committee Report (page 79); Accounting policies (page 124);
and Note 13.3 of the Consolidated Financial Statements (page 139)
Expected credit loss (ECL) provisions under IFRS 9 is an accounting estimate that
carries a high degree of uncertainty driven by judgemental assumptions, including
historical loss rates, their application to the outstanding loan portfolio, forward
looking factors, the application of model overlays (post-model adjustments) to capture
unmodelled risk, and the impact of the economic uncertainty, natural disasters
or governmental interventions on these assumptions.
The vast majority of the Group’s lending is short-term, low in value, unsecured
(except for security deposits paid in certain territories) and to women in developing
economies in order to start and grow their businesses. The impact of the current
economic environment and political conditions has impaired the ability of the Group
to distribute and collect loans made to borrowers, which has resulted in increased
risk in certain countries in which the Group operates.
The inherent ability of management to override internal controls in relation to loan
impairment provisions, combined with the subjectivity of the provisions, represents
a risk of fraud.
We involved credit risk modelling specialists to assist in testing the appropriateness
of the model and model assumptions. This testing included:
• Independent recalculation of the loan impairment provision including the allocation
of loans into stages.
• Sensitivity analysis of the assumptions used by management including back-testing
of the provision to evaluate the accuracy of management’s estimation process
and assess for evidence of management bias.
• Reviewing key model assumptions including the loss rates and the application
of loss rate to loans present at the balance sheet date.
• Assessing whether indications of model weakness exist which could reasonably
give rise to a material misstatement in the ECL estimate.
In order to further challenge the reasonableness of the ECL recorded by management,
we produced an independent challenger model using the complete loan portfolio
and auditor-defined assumptions. This challenger model included the consideration
of the completeness and accuracy of model overlays, including forward-looking
factors, through a review of post balance sheet events and a consideration
of historical loss patterns and forecasting accuracy.
We evaluated the criteria used to allocate a financial asset to stage 1, 2 or 3
in accordance with IFRS 9.
We performed a test of the dataflows into the ECL model, including the arrears,
last payment date, write-off and recoveries data.
We inquired of management and reviewed the minutes of Board and other key
meetings in order to identify if any specific events or circumstances exist which
may trigger the need for incremental provisions.
We assessed the adequacy and appropriateness of the disclosures with reference
to IFRS 7 and IFRS 9 requirements.
We communicated that we are satisfied
that ECL provisions were reasonable and
in compliance with IFRS 9.
We highlighted to the Audit and Risk
Committee that there are heightened levels
of uncertainty in determining forecast
losses due to the ongoing impact of
economic uncertainty.
We concluded that disclosures relating
to loan impairments were in compliance
with the requirements of UK adopted
international accounting standards.
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Risk Our response to the risk
Key observations communicated to the Audit
and Risk Committee
Risk of fraud in revenue recognition through the incorrect recording of revenue
arising from fictitious loans and advances to customers (2023: $135.7m,
2022: $161.2m)
Refer to the Audit and Risk Committee Report (page 79); Accounting policies (page 119);
and Note 4.1 of the Consolidated Financial Statements (page 134)
The income recognised may be fraudulently misstated due to the incorrect recording
of interest income arising from loans being disbursed to fictitious borrowers, or
otherwise fraudulently recorded, in order to manipulate income or disguise losses.
The heightened volume of impaired loans also increases the complexity in the
recording of interest income.
For a sample of loans across each of the eight trading full scope components,
we independently recalculated the interest income using contractual terms from
borrower agreements and agreed them through to the amounts recorded in the
financial statements. This testing included a calculation of the impact of payment
deferrals and payment moratoria on the recording of income under IFRS 9.
For a sample of borrowers across the eight trading full scope components we
attended the borrower group meetings, where the borrowers meet periodically
as a group to make scheduled payments, and physically verified the identity of the
borrowers and traced the loan outstanding balance per the borrower’s passbook to
the accounting records. Where it was not possible to perform physical verification of
borrowers in person, due to the impact of local social restrictions, borrower existence
was tested through alternative means, including video conference and phone calls.
We performed an independent calculation of income recorded on IFRS 9 stage 3 loans
and compared it to that recorded by Management.
We reported to the Audit and Risk
Committee our conclusion that the
recording of interest income was found
to be materially accurate.
From our test of income recorded on
impaired loans we reported to the Audit
and Risk Committee that the balance was
materially accurate.
Our audit procedures did not identify
evidence of fraud in the recognition
of revenue.
In the prior year we identified a key audit matter in relation to the valuation of deferred tax assets. We determined this to no longer be a key audit matter following the adjustments recorded in the 2022 Annual Report
and Accounts.
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Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit and Risk Committee that we would report to them all uncorrected audit differences
in excess of $0.11m (2022: $0.11m), which is set at 5% of planning materiality, as well as differences below
that threshold that, in our view, warranted reporting on qualitative grounds. The reporting threshold for the
Parent Company was $0.04m (2022: $0.04m).
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed
above and in light of other relevant qualitative considerations in forming our opinion.
Other information
The other information comprises the information included in the annual report other than the financial
statements and our auditor’s report thereon, including the Strategic Report on pages 01 to 67, the Governance
Report on pages 68 to 100 and Additional Information on pages 172 to 176. The directors are responsible for
the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent
otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared
in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified
misstatements on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be
expected to influence the economic decisions of the users of the financial statements. Materiality provides
a basis for determining the nature and extent of our audit procedures.
We determined materiality for the Group to be $2.1m (2022: $2.2m), which is 5% (2022: 5%) of adjusted profit
before tax (2022: profit before tax). We believe that profit before tax provides us with the most appropriate
basis for materiality given the Group is a profit orientated entity. We adjusted the Group’s pre-tax profit for
the impact of hyperinflationary accounting per IAS 29 where the impact is not pervasive across the Group
and of foreign exchange movements for those countries which we considered movements to be non-recurring
in nature.
We determined materiality for the Parent Company to be $717k (2022: $711k) which is 0.5% of total assets
(2022: 0.5%). We consider that, in respect of the Parent Company, total assets is most relevant to the
stakeholders and representative of the economic size of the entity and, as such, provides us with an
appropriate basis for determining the nature, timing and extent of risk assessment procedures, identifying
and assessing the risk of material misstatement and determining the nature, timing and extent of further audit
procedures.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to
an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements
exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall control
environment, our judgement was that performance materiality was 50% (2021: 50%) of our planning
materiality, namely $1.1m (2022: $1.1m). We have set performance materiality at this percentage (which is
at the lowest end of the range of our audit methodology) based on various considerations including the past
history of misstatements and the effectiveness of the control environment.
Audit work at component locations for the purpose of obtaining audit coverage over significant financial
statement accounts is undertaken based on a percentage of total performance materiality. The performance
materiality set for each component is based on the relative scale and risk of the component to the Group as
a whole and our assessment of the risk of misstatement at that component. In the current year, the range
of performance materiality allocated to components was $0.22m to $0.51m (2022: $0.22m to $0.49m).
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Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 99, the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and
fair view, and for such internal control as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group and Parent
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 the directors either intend to liquidate the Group
or the Parent Company or to cease operations, or have no realistic alternative but to do so.
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 ISAs (UK) 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.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of
not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from
error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations,
or through collusion. The extent to which our procedures are capable of detecting irregularities, including
fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests
with both those charged with governance of the company and management.
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group
and determined that the most significant are:
– Financial Conduct Authority (‘UK Listing Authority’ or UKLA’) Listing Rules;
– Companies Act 2006; and
– Legal and regulatory frameworks in operation in the countries in which the Group operates.
• We understood how ASA International Group plc complies with these legal and regulatory frameworks by
making enquiries of Management, internal audit, and those responsible for legal and compliance matters.
We also reviewed correspondence between the Group and its regulators; reviewed minutes of the key
committee meetings and gained an understanding of the Group’s approach to governance, demonstrated
by the Board’s approval of the Group’s governance framework, and the Board’s review of the Group’s risk
management framework (‘RMF’) and internal control processes.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report
or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit
have not been received from branches not visited by us; or
• the parent company financial statements and the part of the directors’ remuneration Report to be audited
are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Corporate Governance Statement
We have reviewed the directors’ statement in relation to going concern, longer-term viability and that part
of the Corporate Governance Statement relating to the Group and Parent Company’s compliance with the
provisions of the UK Corporate Governance Code specified for our review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of
the Corporate Governance Statement is materially consistent with the financial statements or our knowledge
obtained during the audit:
• Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting
and any material uncertainties identified set out on page 99;
• Directors’ explanation as to its assessment of the company’s prospects, the period this assessment covers
and why the period is appropriate set out on page 83;
• Director’s statement on whether it has a reasonable expectation that the group will be able to continue
in operation and meets its liabilities set out on page 83;
• Directors’ statement on fair, balanced and understandable set out on page 99;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set
out on page 83;
• The section of the annual report that describes the review of effectiveness of risk management and
internal control systems set out on pages 82 and 83; and;
• The section describing the work of the Audit and Risk Committee set out on pages 79 to 83.
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Independent auditor’s report to the members
of ASA International Group plc continued
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16
of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
company and the company’s members as a body, for our audit work, for this report, or for the opinions we
have formed.
Hitesh Patel (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
26 April 2024
• As the primary team we held discussions with each of the component teams during our Group Audit
Conference, and reviewed their component reporting to us, in order to understand the applicable legal
and regulatory frameworks at a component level and how the Group complies with these.
• We assessed the susceptibility of the Group’s financial statements to material misstatement, including how
fraud might occur by holding discussions with senior management, internal audit and the Audit and Risk
Committee and through an analysis of financial reporting information and areas of estimation which could
be subject to manipulation. We considered the risk of fraud through management override of internal
controls and in revenue recognition and designed specific audit procedures to address these risks,
including those detailed in the Key Audit Matters section above.
• Based on the results of our risk assessment we designed our audit procedures to identify non-compliance
with such laws and regulations. Our procedures involved enquiries of the Legal team, the Audit and Risk
Committee, senior management, internal audit and the review of reports prepared by internal audit, legal
and compliance and the Group’s Fraud and Misappropriation Unit. We also reviewed the whistleblowing
reports presented to the Group’s Audit and Risk Committee throughout the year. In order to further
consider legal and regulatory compliance at a component level, we instructed each component audit team
to report to us any instances of non-compliance with laws and regulations to which they had become
aware.
• The Group operates in the financial services industry, which is a highly regulated environment. As such,
the Senior Statutory Auditor considered the experience and expertise of the engagement team, including
auditor’s specialists, to ensure that the team had the appropriate competence and capabilities, which
included the use of specialists where appropriate.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Other matters we are required to address
• Following the recommendation from the Audit and Risk Committee, we were appointed by the Company
on 12 July 2018 to audit the financial statements for the year ending 31 December 2018 and subsequent
financial periods. The period of total uninterrupted engagement including previous renewals and
reappointments is six years, covering the years ending 31 December 2018 to 31 December 2023.
• The audit opinion is consistent with the additional report to the Audit and Risk Committee.
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Financial Statements continued
Consolidated income statement and statement of comprehensive income
for the year ended 31 December 2023
2023 2022
Notes USD’000 USD’000
Other comprehensive income:
Foreign currency exchange differences on translation of foreign
operations
(24,131)
(33,995)
Movement in hedge accounting reserve
23.
(1,669)
3,004
Tax on OCI and other items
555
(1,152)
Total other comprehensive loss to be reclassified to profit or
loss in subsequent periods, net of tax
(25,245)
(32,143)
Gain on revaluation of MFX investment
15.
29
7
Actuarial gain on defined benefit liabilities
8.1.
448
470
Total other comprehensive income not to be reclassified to
profit or loss in subsequent periods, net of tax
477
477
Total comprehensive loss for the period, net of tax
(16,011)
(13,779)
Total comprehensive loss attributable to:
Equity holders of the parent
(15,576)
(13,770)
Non-controlling interest
(435)
(9)
(16,011)
(13,779)
Earnings per share
39.
USD
USD
Equity shareholders of the parent for the period:
Basic earnings per share
0.09
0.18
Diluted earnings per share
0.09
0.18
The notes 1 to 39 form an integral part of these financial statements.
2023 2022
Notes USD’000 USD’000
Interest income calculated using the effective interest method
4.1.
147,410
173,856
Other interest and similar income
4.2.
29,200
4,123
Interest and similar income
176,610
177,979
5.
(37,756)
(40,322)
Net interest income
138,854
137,657
Other operating income
6.
9,349
10,351
Total operating income
148,203
148,008
Credit loss expense
7.
(5,024)
(643)
Net operating income
143,179
147,365
Personnel expenses
8.
(62,159)
(60,475)
Depreciation on property and equipment
16.
(1,870)
(1,816)
Depreciation on right-of-use assets
17.
(3,722)
(3,931)
Other operating expenses
9.
(35,476)
(33,303)
Exchange rate differences
10.
(1,968)
(1,559)
Loss on net monetary position
2.5.8
(5,789)
–
Total operating expenses
(110,984)
(101,084)
Profit before tax
32,195
46,281
Income tax expense
11.
(20,149)
(27,174)
Withholding tax expense
11.7.
(3,289)
(1,220)
Profit for the period
8,757
17,887
Profit for the period attributable to:
Equity holders of the parent
9,206
17,892
Non-controlling interest
(449)
(5)
8,757
17,887
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Consolidated statement of financial position
as at 31 December 2023
2023 2022
Notes USD’000 USD’000
Liabilities
Debt issued and other borrowed funds
25.
273,411
261,301
Due to customers
26.
79,095
84,155
Retirement benefit liability
8.1.
4,838
4,593
Current tax liability
11.1.
9,326
8,873
Deferred tax liability
11.3.
2,406
2,184
Lease liabilities
17.
3,272
3,091
Derivative liabilities
19.
78
456
Other liabilities
27.
39,563
34,400
Provisions
28.
1,428
1,038
Total liabilities
413,417
400,091
Total equity and liabilities
490,027
489,752
Approved by the Board of Directors on 26 April 2024
Signed on behalf of the Board
Karin Kersten
Tanwir Rahman
CEO
CFO
The notes 1 to 39 form an integral part of these financial statements.
2023 2022
Notes USD’000 USD’000
Assets
Cash at bank and in hand
12.
76,429
83,117
Loans and advances to customers
13.
330,157
331,898
Due from banks
14.
42,097
38,900
Equity investments at Fair Value through Other
Comprehensive Income (‘FVOCI’)
15.
273
244
Property and equipment
16.
7,237
3,513
Right-of-use assets
17.
4,785
4,589
Deferred tax assets
11.2.
5,769
4,625
Other assets
18.
13,490
9,970
Derivative assets
19.
2,450
7,855
Intangible assets
20.
7,340
5,041
Total assets
490,027
489,752
Equity and liabilities
Equity
Issued capital
21.
1,310
1,310
Retained earnings
22.
185,864
173,297
Other reserves
23.
2,758
3,324
Foreign currency translation reserve
24.
(111,998)
(88,123)
Total equity attributable to equity holders of the parent
77,934
89,808
Total equity attributable to non-controlling interest
32.6
(1,324)
(147)
Total equity
76,610
89,661
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Consolidated statement of changes in equity
for the year ended 31 December 2023
Foreign
currency Non-
Issued Retained Other translation controlling
capital earnings reserves reserve interest Total
USD’000USD’000USD’000USD’000USD’000USD’000
At 1 January 2022
1,310
155,405
995
(54,132)
(135)
103,443
Profit for the year
–
17,892
–
–
(5)
17,887
Other comprehensive income:
Actuarial gains and losses on defined benefit liabilities
–
–
470
–
–
470
Foreign currency translation of assets and liabilities of subsidiaries
–
–
–
(33,991)
(4)
(33,995)
Movement in hedge accounting reserve
–
–
3,004
–
–
3,004
Other comprehensive income (net of tax)
–
–
(1,145)
–
(3)
(1,148)
Total comprehensive income/(loss) for the period
–
17,892
2,329
(33,991)
(12)
(13,782)
At 31 December 2022
1,310
173,297
3,324
(88,123)
(147)
89,661
At 1 January 2023
1,310
173,297
3,324
(88,123)
(147)
89,661
Impact of loan reclassification at Fair Value Through Profit and Loss (‘FVTPL’)
–
2,392
–
–
–
2,392
Impact of IAS 29 (hyperinflation)
–
–
–
256
–
256
Profit for the year
–
9,206
–
–
(449)
8,757
Share-based payments
–
–
71
–
–
71
Other comprehensive income:
Actuarial gains and losses on defined benefit liabilities
–
–
448
–
–
448
Foreign currency translation of assets and liabilities of subsidiaries
–
(14)
–
(24,131)
14
(24,131)
Movement in hedge accounting reserve
–
–
(1,669)
–
–
(1,669)
Other comprehensive income (net of tax)
–
983
584
–
(742)
825
Total comprehensive income/(loss) for the period
–
10,175
(566)
(24,131)
(1,177)
(15,699)
At 31 December 2023
1,310
185,864
2,758
(111,998)
(1,324)
76,610
The notes 1 to 39 form an integral part of these financial statements.
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2023 2022
Notes USD’000 USD’000
Operating activities
Profit before tax
32,195
46,281
Adjustment for movement in:
Operating assets
29.1.
(79,376)
(19,297)
Operating liabilities
29.2.
12,739
15,043
Non-cash items
29.3.
39,982
19,063
Income tax paid
(22,213)
(17,972)
Net cash flows (used in)/from operating activities
(16,673)
43,118
Investing activities
Purchase of property and equipment
16.
(4,372)
(1,575)
Proceeds from sale of property and equipment
(840)
333
Purchase of Intangible assets
(2,284)
(4,592)
Net cash flow (used in) in investing activities
(7,496)
(5,834)
Financing activities
Proceeds from debt issued and other borrowed funds
243,352
167,394
Payments of debt issued and other borrowed funds
(212,101)
(192,764)
Payment of principal portion of lease liabilities
(3,690)
(4,353)
Net cash flow from/(used in) financing activities
27,561
(29,723)
Cash and cash equivalents at 1 January
83,117
87,951
Net increase in cash and cash equivalents
3,392
7,561
Impact of IAS 29 (hyperinflation)
(593)
–
Foreign exchange difference on cash and cash equivalents
(9,487)
(12,395)
Cash and cash equivalents as at 31 December
12.
76,429
83,117
Operational cash flows from interest
Interest received
179,369
181,534
Interest paid
38,845
39,941
Amounts reported above may differ from the actual underlying cash flows on the date of the transaction as they have been adjusted due to the impact of accounting for the effects of the subsidiaries in Ghana and Sierra
Leone operating in hyperinflationary economies.
The notes 1 to 39 form an integral part of these financial statements.
Financial Statements continued
Consolidated statement of cash flows
for the year ended 31 December 2023
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1. Corporate information
ASA International Group plc (‘ASA International’, the ‘Group’) is a public company limited by shares bearing
registration number 11361159 in England and Wales. The entity was incorporated by Catalyst Microfinance
Investors (‘CMI’) on 14 May 2018 for the purpose of the initial public offer of ASA International Holding. ASA
International Group plc acquired 100% of the shares in ASA International Holding and all its subsidiaries on
13 July 2018 in exchange for the issue of 100 million shares in ASA International Group plc with a nominal
value of GBP 1.00 each (value per share of GBP 0.01 each after capital reduction). ASA International Group
plc has a premium listing on the main market of the London Stock Exchange.
Investment strategy
ASA International Group plc is a microfinance holding company, operating through its various subsidiaries
in Asia and Africa.
Abbreviation list
Definitions Abbreviation
A1 Nigeria Consultancy Limited A1 Nigeria
ASA Dwaso Limited ASA Dwaso
ASA International Group plc ASAIG
ASA International Holding ASAIH
ASA International Group plc Employee Benefit Trust ASAIG plc EBT
ASA International India Microfinance Limited ASA India
ASA International(Kenya) Limited (formerly ‘ASA International Microfinance
(Kenya) Limited’) ASA Kenya
ASA International N.V. ASAI NV
ASA Lanka Private Limited ASA Lanka
ASA Microfinance (Myanmar) Limited ASA Myanmar
ASA Microfinance (Rwanda) Limited ASA Rwanda
ASA Microfinance (Sierra Leone) ASA Sierra Leone
ASA Microfinance (Zanzibar) Limited ASA Zanzibar
ASA Microfinance (Tanzania) Limited ASA Tanzania
ASA Microfinance (Uganda) Limited ASA Uganda
ASA Microfinance Zambia Limited ASA Zambia
ASA NGO-MFI registered in Bangladesh ASA NGO Bangladesh
ASA Microfinance Bank (Pakistan) Limited ASA Pakistan
ASA Savings & Loans Limited ASA S&L
ASHA Microfinance Bank Limited ASA Nigeria
ASAI Investments & Management B.V ASAI I&M
ASAI Management Services Limited AMSL
Association for Social Improvement and Economic Advancement ASIEA
C.M.I. Lanka Holding (Private) Limited CMI Lanka
Catalyst Continuity Limited Catalyst Continuity
Definitions Abbreviation
Catalyst Microfinance Investment Company CMIC
Catalyst Microfinance Investors CMI
Corporate Social Responsibility CSR
CMI International Holding CMII
Lak Jaya Micro Finance Limited Lak Jaya
Pagasa ng Masang Pinoy Microfinance, Inc Pagasa
PagASA ng Pinoy Mutual Benefit Association, Inc. MBA Philippines
Pagasa Consultancy Limited Pagasa Consultancy
Pagasa Philippines Finance Corporation PPFC
Pagasa Philippines Finance Corporation and Pagasa ng Masang Pinoy
Microfinance, Inc Pagasa Philippines
Pinoy Consultancy Limited Pinoy
PT PAGASA Consultancy PT PAGASA Consultancy
Microfinance Institution MFI
Reserve Bank of India RBI
State Bank of India SBI
Standard & Poor’s S&P
Sequoia B.V. Sequoia
Financial Statements continued
Notes to the consolidated financial statements
for the year ended 31 December 2023
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2. Material accounting policies
2.1 General
The consolidated financial statements of ASA International Group plc have been prepared on a historical cost
basis, except for loans that failed Solely Payments of Principal and Interest (‘SPPI’) tests, derivative and equity
instruments, which have been measured at fair value. Additionally, the financial information of subsidiaries
operating in hyperinflationary economies have been adjusted to reflect their current purchasing power. The
consolidated financial statements are presented in USD and all values are rounded to the nearest thousand
(USD’ 000), except when otherwise indicated. The Group has consistently applied the following accounting
policies to all periods presented in these consolidated financial statements, except for as mentioned in Section
2.3. In addition, the Group adopted Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice
Statement 2) from 1 January 2023. The amendments require the disclosure of ‘material’, rather than
‘significant’, accounting policies. The amendments did not result in any changes to the accounting policies
themselves.
ASA International applied hyperinflation accounting for its operations in Ghana and Sierra Leone. In 2023,
the three-year cumulative inflation in both countries exceeded 100% and as a result, hyperinflation accounting
was applied for the first time for the year ended 31 December 2023. For more information refer to note 2.5.8
“Hyperinflation”.
The consolidated financial statements for the year ended 31 December 2023 were authorised for issue
in accordance with a resolution of the Directors on 26 April 2024. After the issue of the financial statements
the Company’s owners or others do not have the power to amend the financial statements.
2.1.1 Basis of preparation
The 2023 consolidated financial statements have been prepared on a going concern basis. It should be noted
that in the 2022 Annual Report and Accounts, approved on 21 April 2023, senior management and the
Directors concluded that there was a material uncertainty that may cast significant doubt over the Group’s
ability to continue as a going concern relating to debt covenant breaches, and potential actions to mitigate
debt being called due. In performing the going concern assessment for the 2023 Consolidated Annual Report
and Accounts the Directors have considered the global economic challenges arising out of high inflation and
the strengthening of the USD against operating currencies in major operating markets for the period up to
31 May 2025 (the ‘Assessment Period’). The conclusion of this assessment remains consistent with that
of the 2022 Annual Report and Accounts. Senior management and the Directors have therefore concluded
that there is a material uncertainty that may cast significant doubt over the Group’s ability to continue as
a going concern.
The Group has updated its detailed financial model for its budget and projections (the ‘Projections’) in line
with current market conditions. The management team used the actual numbers up to December 2023 and
updated the operating projections for the Assessment Period. These Projections are based on a detailed set
of key operating and financial assumptions, including the minimum required cash balances, capital and debt
funding plan per operating subsidiary, economic conditions of the countries, senior management’s estimation
of increased credit and funding risks, and current economic challenges faced by different operating
subsidiaries resulting from increased inflation, which has a possibility to reduce demand for new microfinance
loans. As a microfinance lender, the Group sees the service it provides to clients as an important factor for
them to continue their businesses as it provides resources and access to capital to the financially underserved.
Therefore, the Group has a high degree of confidence that the additional risks posed by rising inflation will not
increase arrears materially, however, this remains a risk.
The Group remains well capitalised and in compliance with minimum capital requirements in all markets.
In terms of liquidity, the Group has USD 48.2 million of unrestricted cash and cash equivalents as of
31 December 2023 and a strong funding pipeline of USD 152 million with over 96% having agreed terms
and which can be accessed in the short to medium term . This reaffirms the confidence lenders have in the
strength of the Group’s business model and senior management’s ongoing strategies to steer the Group
through the current economic situation. It should be noted that the majority of this additional funding contains
loan covenants and there is a risk of covenant breaches in certain stress scenarios, consistent with the risks
detailed in the remainder of the going concern assessment. The Group is confident it will generate positive
cash flows and will be able to fully fund the projected loan portfolio throughout the assessment period.
The Group does not expect a significant increase in credit loss expenses during the Assessment Period than
what is projected, as in all entities, collections are back to the high 90% range and the proportion of loans with
overdue payments greater than 30 days (portfolio at risk greater than 30 days, or ‘PAR>30’) have generally
stabilized. However, PAR>30 remains high for India (on-book portfolio), Sri Lanka, Nigeria, Sierra Leone and
Rwanda, though the Group expects this to improve in the medium to long term as it implements strategies
to improve collections in these markets. The management team is closely following up on the developments.
Due to the above challenges, the Group expects continued breaches of loan covenants during the Assessment
Period at subsidiary level. The breaches mainly relate to portfolio quality and potentially, capital adequacy
ratio covenants. These breaches have not historically resulted in the immediate repayment request from
lenders and are further evidenced by the supportive attitude of lenders in the last four years where the Group
has been continuously able to raise new funds from the lenders. As of 31 December 2023, out of the total
outstanding debt of USD 268.5 million, the balance for credit lines with breached covenants that did not have
waivers amounted to USD 23.0 million. By now waivers have been received for all current breached
covenants.
The international funders have been supportive of the Group and the microfinance sector in general during
the last four years. In the absence of waivers, breaches of covenants that are not rectified within the time
specified in the respective agreements, as applicable, would cause an event of default under the loan
agreements. The Group is also experiencing delays on the movement of funds from certain countries, due to
the global USD crisis, which could restrict the ability of the Group to support the funding or debt repayment
requirements in the countries in which it operates or at overall Group level.
Unless the covenant breach waivers are obtained as and when required the debt may be called due, which
could materially impact the ability of the Group to meet its debt obligations. The Group has a history of
negotiating covenant waivers, where required, and it has recently negotiated extension of loan terms in
India which indicates that the chance of an early debt call is low. However, the current economic and market
conditions make it difficult to assess its likely scale and impact on debt covenant breaches and whether
the waivers necessary to avoid the immediate repayment of debt or further extension of loan terms will
be forthcoming.
In terms of mitigations, the Group can shrink its exposure in certain countries by focusing on the collection of
existing loans and curtailing disbursements. This is not a preferred action but can be utilised to create liquidity
in any country’s operation when unexpected repayments are requested by lenders. In India, additional focus
has been on off-book disbursements and finding new business correspondent partners (‘BC Partners’) as this
serves to increase the available cash in the business. Further, the holding entities within the Group did not
provide parent guarantees to funders of the operating subsidiaries, which protects the Group against cross
defaults .
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2.1.4 Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries
as at 31 December for each year presented. The financial statements of subsidiaries are similarly prepared
for the year ended 31 December 2023 applying similar accounting policies. All intra–Group balances,
transactions, income and expenses and profits and losses resulting from intercompany transactions are
eliminated in full. Subsidiaries are fully consolidated from the date on which control is transferred to the
Company. The Company has control over a subsidiary when it is exposed, or has rights to variable returns
from its involvement with the subsidiary and has the ability to affect those returns through its power over
the subsidiary. The results of subsidiaries acquired or disposed of during the year are included (if any) in the
consolidated statement of comprehensive income from the date of acquisition or up to the date of disposal,
as appropriate. Non- controlling interests represent the portion of profit or loss and net assets not owned,
directly or indirectly, by the Group and are presented separately in the consolidated statement of
comprehensive income and within equity in the consolidated statement of financial position, separately
from the equity attributable to equity holders of the parent.
2.2 Summary of material accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set
out below:
2.2.1 Foreign currency translation
The consolidated financial statements are presented in USD, which is also the Group’s functional currency.
Each entity in the Group determines its own functional currency and items included in the financial statements
of each entity are measured using that functional currency. The Group uses the direct method of consolidation.
Transactions and balances –Transactions in foreign currencies are initially recorded by the Group’s entities
at their respective functional currency at the date the transaction first qualifies for recognition. Monetary
assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates
of exchange at the reporting date. All differences are taken to ‘Exchange rate differences’ in the statement
of profit or loss and other comprehensive income.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in
a foreign currency are translated using the exchange rates at the date when the fair value was determined.
Group companies – As at the reporting date, the assets and liabilities of subsidiaries are translated into the
Group’s presentation currency (USD) at the rate of exchange ruling at the reporting date except investments
in subsidiaries and issued capital, which are translated at historical rate, and their statements of profit or loss
and other comprehensive income are translated at the monthly average exchange rates for the year. Currency
translation differences have been recorded in the Group’s consolidated statement of financial position as
foreign currency translation reserve through other comprehensive income.
All amounts (i.e. assets, liabilities, equity, income and expenses) of the entities whose functional currencies
are the currencies of a hyperinflationary economy are translated at the closing rate at the reporting date.
2. Material accounting policies continued
2.1 General continued
Senior management and the Board of Directors extensively challenged the Projections and their underlying
assumptions including the above considerations. They also considered the risks around economic
uncertainties resulting from high inflation, devaluation of local currencies, delays in dividend distribution,
increased operational costs, and the risk of not obtaining waivers for prospective covenant breaches. The
Group also prepared stress and reverse stress scenarios for cash flows including the mitigating actions which
include distribution of dividends and short-term loans from subsidiaries which have sufficient cash reserves.
Senior management and the Directors have also assessed the probable impact of any subsidiary failing to
maintain its required regulatory ratios. Given the level of arrears and business challenges in India there is a
potential risk of breaching capital requirements of the Reserve Bank of India (‘RBI’) if the entity cannot
improve its overdue realisation and maintain operating profits. Should these requirements be breached then
the possible implications could be that the RBI provides management with a remediation plan and/or further
capital could be required. As stated earlier, the Group did not provide parent guarantees to funders of the
operating subsidiaries and hence in case of dissolution, the Group’s risk is limited to its capital investment
and any shareholder loans.
Nevertheless, having assessed the Projections, downtrend analysis and mitigations described above, senior
management and the Directors have a reasonable expectation that the Group has adequate resources to
continue in operational existence for at least twelve months from the date of approval of the consolidated
financial statements, and through to 31 May 2025. For these reasons, they continue to adopt a going concern
basis for the preparation of the consolidated financial statements. Accordingly, these financial statements
do not include any adjustments to the carrying amount or classification of assets and liabilities that would
result if the Group was unable to continue as a going concern.
2.1.2 Statement of compliance
The Group and Parent Company financial statements are prepared in accordance with UK adopted
International Accounting Standards (‘IAS’ or ‘IFRS’).
The preparation of the consolidated financial statements in conformity with IFRS requires management
to make judgements, estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
2.1.3 Consideration of climate change
In preparing these financial statements, the Group has given consideration to the recommendations laid out
by the Task Force on Climate- related Financial Disclosures (TCFD) and the requirements as per section 414CB
of the Companies Act 2006. The relevant assessment of the climate-related risks outlined in the Group’s
Annual Report on page 61 has been incorporated into judgements associated with recognition, measurement,
presentation and disclosure, where so permitted by UK adopted IAS. The accounting judgements relating
to climate change are presented in note 2.5.1(F) and note 30.6.
While there is currently no significant impact expected from climate change, the Directors are aware of the
constant evolving risks attached to climate change and will regularly assess these risks against judgements
and estimates made in preparation of the financial statements.
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Financial assets designated at fair value through OCI without recycling
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity
instruments designated at fair value through OCI when they meet the definition of equity under IAS 32
Financial Instruments: Presentation and are not held for trading. The classification is determined on an
instrument-by-instrument basis. Investments at FVOCI are subsequently measured at fair value with
unrealised gains or losses recognised in OCI and credited to the Investments at FVOCI reserve. Gains
and losses on these financial assets are never recycled to profit or loss. Equity instruments designated
at fair value through OCI are not subject to impairment assessment.
Derivatives are initially recognised at FVTPL. However, as the Group applies cash flow hedge accounting
the impact is later moved to FVOCI.
Financial assets at FVTPL
Financial assets at FVTPL are subsequently measured at fair value. Net gain and losses are recognised in profit
or loss.
Derecognition
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets)
is derecognised where:
• The right to receive cash flows from the asset has expired; or
• The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation
to pay the received cash flows in full without material delay to a third party under a ‘pass-through’
arrangement; and
• Either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group
has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred
control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass–
through arrangement, and has neither transferred nor retained substantially all the risks and rewards of the
asset nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuing
involvement in the asset (see note 2.5.4 to 2.5.5). Continuing involvement that takes the form of a guarantee
over the transferred asset is measured at the lower of the original carrying amount of the asset and the
maximum amount of consideration that the Group could be required to repay.
2. Material accounting policies continued
2.2 Summary of material accounting policies continued
2.2.2 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability
or equity instrument of another entity.
a) Financial assets – initial recognition and subsequent measurement
(1) Date of recognition
Purchases or sales of financial assets that require the delivery of assets within the time frame generally
established by regulation or convention in the marketplace are recognised on the trade date, i.e., the date
that the Group commits to purchase or sell the asset.
(2) Initial recognition and measurement
The Group recognises a financial asset in its statement of financial position, when, and only when, the entity
becomes a party to the contractual provisions of the instrument. Financial assets are classified, at initial
recognition, and measured at fair value. Subsequently they are measured at amortised cost, fair value through
Other Comprehensive Income (‘OCI’), and Fair Value Through Profit or Loss (‘FVTPL’). The classification
of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics
and the Group’s business model for managing them.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it
needs to give rise to cash flows that are SPPI on the principal amount outstanding. This assessment is referred
to as the SPPI test and is performed at an instrument level. The Group’s business model for managing financial
assets refers to how it manages its financial assets in order to generate cash flows. The business model
determines whether cash flows will result from collecting contractual cash flows, selling the financial assets,
or both. Financial assets classified and measured at amortised cost are held within a business model with the
objective to hold financial assets in order to collect contractual cash flows while financial assets classified and
measured at fair value through OCI are held within a business model with the objective of both holding to
collect contractual cash flows and selling.
(3) Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in three categories:
• Financial assets at amortised cost (Loans and advances to customers, Other assets, Cash at bank and
in hand and Due from banks);
• Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon
derecognition (equity instruments, derivative instruments under cash flow hedge); and
• Financial assets at FVTPL (loans at FVTPL).
Financial assets at amortised cost
Financial assets at amortised cost are subsequently measured using the effective interest rate (‘EIR’)
method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset
is derecognised, modified or impaired. The Group’s financial assets at amortised cost includes Loans and
advances to customers, Other receivables, Cash and cash equivalents and Due from banks.
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2.2.3 Financial liabilities–Initial recognition and subsequent measurement
(1) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at amortised cost. All financial
liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs. The Group’s financial liabilities include Debt issued and other borrowed
funds, Due to customers, Lease liabilities, Other liabilities, Provisions and Derivative financial instruments.
(2) Subsequent measurement
For the purposes of subsequent measurement, financial liabilities are classified in two categories:
• Financial liabilities at amortised cost (Debt issued and other borrowed funds, Due to customers and Lease
liabilities); and
• Financial liabilities at FVTPL (Derivative instruments).
Financial liabilities at amortised cost
Debt issued and other borrowed funds, Other liabilities and Due to customers are classified as liabilities where
the substance of the contractual arrangement results in the Group having an obligation either to deliver cash
or another financial asset to the holder, or to satisfy the obligation other than by the exchange of a fixed
amount of cash or another financial asset for a fixed number of own equity shares. After initial measurement,
Debt issued and other borrowed funds including Due to customers are subsequently measured at amortised
cost using the EIR method. Amortised cost is calculated by considering any discount or premium on the issue
and costs that are an integral part of the EIR.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different
terms, or the terms of an existing liability are substantially modified, such an exchange or modification is
treated as the derecognition of the original liability and the recognition of a new liability. The difference in the
respective carrying amounts is recognised in the statement of profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement
of financial position only if there is a currently enforceable legal right to offset the recognised amounts and
there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
2. Material accounting policies continued
2.2 Summary of material accounting policies continued
b) Impairment of financial assets
The Group recognises an allowance for Expected Credit Losses (‘ECLs’) on Loans and advances to customers,
Related party receivables, Cash at bank and Due from banks.
Loans and advances to customers
Given the nature of the Group’s loan exposures (generally short-term exposures, <12 months) no distinction
has been made between stage 1 (12 months ECL) and stage 2 loans (lifetime ECL) for the ECL calculation.
For disclosure purposes normally stage 1 loans are defined as loans overdue between 1-30 days. Stage 2 loans
are overdue loans between 31-90 days. To avoid the complexity of calculating separate probability of default
and loss given default, the Group uses a ‘loss rate approach’ for the measurement of ECLs. The ‘loss rates’
are determined based on historical credit loss experience, adjusted for forward-looking factors specific to
economic environment.
The Group considers significant increase in credit risk when contractual payments are 31 days past due.
In addition, loans and advances are treated as credit impaired (stage 3) when contractual payments are greater
than 90 days past due.
Write-off
The Group uses judgement to determine bad loans which are written off. Based on management experience
in the local market and the microfinance industry practice, loans over 365 days past due are bracketed as bad,
unless there are specific circumstances that lead local management to believe that there is a reasonable
expectation of recovery. In Pakistan loans over 209 days are treated as bad as per regulatory requirement.
The write-offs occur mainly two times in a year (June and December). However, management (Group and/or
subsidiary) can write-off loans earlier if loans are deemed unrecoverable or delay write-offs in case of national
calamity or any regulatory reasons subject to Board approval. From an operational perspective all overdue
loans are monitored for recovery up to two years overdue.
Cash at bank, Due from banks and Related party
For Due from banks and Related party receivables, the Group used the S&P matrix for default rates based
on the most recent publicly made available credit ratings of each counterparty. In the S&P matrix for default
rates, there is no specified default rate for each of our external counterparties. Thus, the Group applied the
default rate for all financial institutions. Then, the Group calculated the adjusted Probability of Default (‘PD’)/
default rates by accommodating management estimates. However, for non-credit rated external
counterparties; the PD/default rate is determined by choosing the riskier one between the mid-point of credit
ratings of banks the Group has business with and a similar level rated entity. Management collects the credit
ratings of the banks where the funds are deposited and related parties (where applicable) on a half-yearly basis
and calculates the ECL on such items using the default rate identified as above. The Group considers credit
risk to have significantly increased when the credit ratings of the bank and the related parties have been
down-graded which in turn increases the probability of default. The Group considers that the closure of
a counterparty bank, dissolution of a related party or a significant liquidity crisis or any objective evidence
of impairment such as bankruptcy to be indicators for stage 3.
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(2) Dividend income
Dividend income is recognised when the Group’s right to receive the payment is established.
(3) Other income
Other income includes group member’s admission fees, document fees, sale of passbook, income on death
and multipurpose risk funds and service fees from off–book loans under the BC model.
Group members’ admission fees, document fees and sale of passbook fees are recognised on receipt as the
then admission and sale constitutes as satisfactory performance obligation.
The Group collects fees for the death risk fund or multipurpose risk fund in the Philippines, Sri Lanka, Kenya
and Uganda. These fees cover settlement of the outstanding loan amount and other financial assistance
if a borrower dies or becomes disabled. The collections are recognised upfront as income and a liability is
recognised in the statement of financial position for the claims resulting from these funds. The judgement
used to recognise the liability is disclosed in note 2.5.3 and 2.3.1.
Service fees from off–book loans under the BC model are recognised on the basis of loan disbursement as the
amount is received only after completion of the service.
2.2.6 Cash and cash equivalents
Cash and cash equivalents as referred to in the statement of cash flows comprises of Cash in hand and Cash
at bank, included in which is both restricted and unrestricted cash at bank. Restricted cash at bank relates to
Loan Collateral Build Up (‘LCBU’) in the Philippines and security deposits from clients in Tanzania as disclosed
in note 12. Unrestricted cash at Bank relates to current accounts, on demand accounts and term deposits that
have a maturity date of three months or less from the date of acquisition, held with commercial banks.
2.2.7 Property and equipment
Property and equipment is stated at cost excluding the costs of day-to-day servicing, less accumulated
depreciation and accumulated impairment in value. Changes in the expected useful life are accounted for by
changing the depreciation period or method, as appropriate, and are treated as changes in accounting estimates.
Depreciation is calculated using the straight-line method to write down the cost of property and equipment
to their residual values over their estimated useful lives.
The estimated useful lives are as follows:
Furniture and Fixtures: 5 Years
Vehicles: 5 Years
Office equipment including IT: 3 Years
Buildings: 50 Years
An item of property and equipment is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is recognised in ‘Other operating income’ or ‘Other operating
expenses’ in the statement of profit or loss and other comprehensive income in the year the asset is derecognised.
2. Material accounting policies continued
2.2 Summary of material accounting policies continued
2.2.4 Derivative instruments and hedge accounting
The Group uses derivative financial instruments, such as forward currency contracts and cross currency
interest rate swaps to hedge its foreign currency risks and interest rate risks. Such derivative financial
instruments are initially recognised at fair value on the date on which a derivative contract is entered into
and are subsequently remeasured at fair value at the end of every reporting period. Derivatives are carried
as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
For the purpose of hedge accounting, hedges are classified as cash flow hedges when hedging the exposure
to variability in cash flows that is either attributable to a particular risk associated with a recognised asset
or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognised firm
commitment.
The effective portion of the gain or loss on the hedging instrument is recognised in OCI in the cash flow hedge
reserve, while any ineffective portion is recognised immediately in the statement of profit or loss. The cash
flow hedge reserve is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the
cumulative change in fair value of the hedged item. The Group uses forward currency contracts and cross
currency interest rate swaps agreements as hedges of its exposure to foreign currency risk and interest rate
risk in forecast transactions and firm commitments.
The Group designates only the spot element of forward contracts as a hedging instrument. The forward
element and cross currency basis risk is recognised in OCI and accumulated in a separate component of equity
under cost of hedging reserve. The forward points and foreign exchange basis spreads are amortised
throughout the contract tenure and reclassified out of OCI into profit and loss (‘P&L’) as interest expenses.
2.2.5 Recognition of income and expenses
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and
the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received
or receivable, considering contractually defined terms of payment and excluding taxes or duties. The Group
has concluded that it is principal in all of its revenue arrangements except for loans under the Business
Correspondence (‘BC’) model where the Group works as an agent.
The following specific recognition criteria must also be met before revenue is recognised:
(1) Interest and similar income and expense
Interest income and expense are recognised in the statement of profit or loss and other comprehensive income
based on the EIR 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 or, when appropriate, a shorter period
to the net carrying amount of the financial asset or financial liability. When calculating the EIR, the Group shall
estimate cash flows considering all contractual terms of the financial instrument but shall not consider future
credit losses. The calculation includes all amounts paid or received between parties to the contract that are an
integral part of the EIR of a financial instrument including transaction costs, and all other premiums or discounts.
Interest income also includes loan processing fees that are integral to the interest rate.
The Group recognises interest income on the stage 3 loans on the net loan balance.
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The Group started to recognise deferred tax on undistributed dividends. Reference is made to note 2.5.7
and note 11.
2.2.9 Dividend distribution on ordinary shares
Dividends on ordinary shares will be recognised as a liability and deducted from equity when they are
approved by the Group’s shareholders. Interim dividends are deducted from equity when they are declared
and no longer at the discretion of the Group. Dividends for the year that were approved after the reporting
date will be disclosed as an event after the reporting date.
2.2.10 Short-term employee benefits
Short–term benefits typically relate to the payment of salaries and wages. These benefits are recorded
on an accrual basis.
2.2.11 Post-employment benefits
2.2.11.1 Defined benefit plan
The Group maintains a defined benefit plan in some subsidiaries, which leads to retirement benefit obligations.
The defined benefit obligation and the related charge for the year are determined using assumptions required
under actuarial valuation techniques. These benefits are unfunded.
Remeasurements, comprising actuarial gains and losses, the effect of the asset ceiling, excluding an amount
included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts
included in net interest on the net defined benefit liability) are recognised immediately in the statement of
financial position with a corresponding debit or credit to retained earnings through OCI in the period in which
they occur. Remeasurements are not reclassified to profit or loss in subsequent periods. Past service costs are
recognised in profit or loss on the earlier of (i) the date of the plan amendment or curtailment, and (ii) the date
that the Group recognises related restructuring costs.
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Group
recognises the following changes in the net defined benefit obligation under operating expenses in the
consolidated statement of comprehensive income: (i) service costs comprising current service costs, past-
service costs, gains and losses on curtailments and non–routine settlements and (ii) net interest expense
or income. Reference is made to note 2.5.2.
2.2.11.2 Defined contribution plan
Defined contribution employee benefits are expensed as they are paid, with an accrual recorded for any
benefits owed, but not yet paid. The expenses of the defined contribution plan are incurred by the employer.
The contributions are to be remitted by the entities to the fund on a monthly basis. Employees are allowed
to withdraw the accumulated contribution in their accounts from this fund as per the terms and conditions
specified in the fund Acts.
2. Material accounting policies continued
2.2 Summary of material accounting policies continued
2.2.8 Taxes
(1) Current tax
Current tax assets and liabilities for the current and prior years are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted at the reporting date in the countries where the Group
operates and generates taxable income. Management periodically evaluates positions taken in the tax returns
with respect to situations in which applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.
(2) Deferred tax
Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are
recognised for all taxable temporary differences, except: (i) where the deferred tax liability arises from the
initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and,
at the time of the transaction, affects neither the accounting profit nor taxable profit or loss, and (ii) in respect
of taxable temporary differences associated with investments in subsidiaries and associates, where the timing
of the reversal of the temporary differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax
credits and unused tax losses, to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry forward of unused tax credits and unused tax
losses, can be set-off: (i) where the deferred tax asset relating to the deductible temporary difference arises
from the initial recognition of an asset or liability in a transaction that is not a business combination and, at
the time of the transaction, affects neither the accounting profit nor taxable profit or loss, and (ii) in respect
of deductible temporary differences associated with investments in subsidiaries and associates, deferred tax
assets are recognised only to the extent that it is probable that the temporary differences will reverse in the
foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are
recognised to the extent that it becomes probable that future taxable profit will allow the deferred tax asset
to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply
in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting date.
Deferred tax assets and deferred tax liabilities can only be offset in the statement of financial position if the
Group has the legal right to settle current tax amounts on a net basis and the deferred tax amounts are levied
by the same taxing authority on the same entity or different entities that intend to realise the asset and settle
the liability at the same time .
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2.2.13 Impairment of non–financial assets
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 Group assesses, at each reporting date, whether there is an indication that an asset may be impaired.
If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the
asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or Cash Generating
Unit’s (‘CGU’s’) fair value less costs of disposal and its value in use. The recoverable amount is determined
for an individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses
of continuing operations are recognised in the statement of profit or loss in expense categories. For assets
excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication
that previously recognised impairment losses no longer exist or have decreased. If such indication exists,
the Group estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss is
reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount
since the last impairment loss was recognised. For Property and equipment, the fair value less costs of
disposal calculation is based on available data from similar assets or observable market prices less incremental
costs of disposing of the asset. For right of use assets (‘ROU’) the fair value is determined based on estimated
rental payments using the IBR used for each country where such ROU exists. If there is a significant change
in discount rates, the fair value is reviewed to assess if there is impairment. The sensitivity analysis on account
of IBR changes is shown in note 17.
The Group has identified the impairment of non-financial assets as one of the areas in which it could be
exposed to the financial impacts of climate change risk, as a number of the Group’s operating areas are prone
to natural disasters. However, as the Group manages a frugal cost operating model with minimum investment
in fixed assets and leases, the impact of climate-related financial loss is expected to be insignificant.
2.2.14 Liability for death and multipurpose risk funds
The Group collects 1–2% of disbursed loan amounts for death risk funds or multipurpose risk funds in certain
markets (the Philippines, Uganda, Kenya and Sri Lanka). These funds cover settlement of the outstanding
loan amount and other financial assistance when the borrower dies or is affected by natural calamities. The
collected amounts are recognised upfront as income and a liability is recognised in the statement of financial
position for the claims resulting from these funds. Reference is made to note 2.5.3 on the key judgement used.
The death risk fund or multipurpose risk fund were no longer included in new loan contracts from August
2023 in Uganda, September 2023 in the Philippines, December 2023 in Kenya and January 2024 in Sri Lanka.
2.2.15 Fair value measurement
The Group measures financial instruments such as derivatives, at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based
on the presumption that the transaction to sell the asset or transfer the liability takes place either: (i) in the
principal market for the asset or liability; or (ii) in the absence of a principal market, in the most advantageous
market for the asset or liability. The principal or the most advantageous market must be accessible by the Group .
2. Material accounting policies continued
2.2 Summary of material accounting policies continued
2.2.12 Intangible assets
The Group has adopted a strategy of enriching the offering to its clients with product diversification by adding
Digital Financial Services (DFS). The DFS will be offered to its clients through a smartphone app, where clients
will be able to apply online for loans and other financial services like a current account and a savings or deposit
account. They will be able to view their loan and account information and make payments including paying
bills. The DFS app will also include additional functions and services such as digital group meetings and a chat
function. As part of the DFS, the Group is also developing a Supplier Market Place app (‘SMP’) where clients
can purchase goods for their businesses. SMP will be a separate app, but is part of the DFS model to retain
and attract loan and savings clients and generate payment transactions that will generate commissions.
For the introduction of current accounts and savings and deposits accounts and other digital services to our
clients, the Group has procured a licence for a Core Banking System (‘CBS’) for its IT infrastructure. The Group
made upfront payments to buy the core banking software licence. The licence for the software is granted for
ten years.
Research and development costs
Research costs are expensed as incurred. Development expenditures on an individual software project are
recognised as an intangible asset when the Group can demonstrate:
• The technical feasibility of completing the intangible asset so that the asset will be available for use
• Its intention to complete and its ability to use it or sell it
• How the asset will generate future economic benefits
• The availability of resources to complete the asset and use or sell it
• The ability to measure reliably the expenditure during development
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any
accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when
development is complete, and the asset is available for use. It is amortised over the period of expected future
benefit. During the period of development, the asset is tested for impairment annually. The break down is
presented in note 20.
A summary of the policies applied to intangible asset is, as follows:
Initial licence and set-up costs Development costs
Useful life Finite (eight years) Finite (eight years)
Amortisation starts After installation for use After installation for use
Amortisation method used Amortised on a straight-line basis
over the period of licence
Amortised on a straight-line basis
over the period of expected usage
Internally generated or acquired Acquired Internally generated
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(2) Subsequent measurement
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest
and reduced for the lease payments made.
2.2.17 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects
some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is
recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating
to a provision is presented in the statement of comprehensive income net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost.
2.2.18 Share-based payments
The Group has granted options (‘Options’) in the Group Company under its Long-Term Incentive Plan (‘LTIP’)
to certain Executive Directors and Persons Discharging Managerial Responsibilities (‘PDMRs’) and other staff
in 2022 and 2023. The Company’s LTIP is designed to incentivise and retain Directors and senior staff, along
with aligning them with shareholders’ interest to create long term value. The transaction is determined as
an equity-settled transaction.
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made
using an appropriate valuation model, further details of which are given in Note 32.1.
That cost is recognised in personnel expenses, together with a corresponding increase in equity (other capital
reserves), over the period in which the service and, where applicable, the performance conditions are fulfilled
(the vesting period). The cost is booked from the date that the beneficiary accepted the grant. The cumulative
expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the
extent to which the vesting period has expired and the Group’s best estimate of the number of equity
instruments that will ultimately vest.
The expense or credit in the statement of profit or loss for a period represents the movement in cumulative
expense recognised as at the beginning and end of that period.
2. Material accounting policies continued
2.2 Summary of material accounting policies continued
The fair value of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy, described as follows, based on the lowest level input that
is significant to the fair value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable; and
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
When the fair values of financial assets and financial liabilities recorded in the statement of financial position
cannot be measured based on quoted prices in active markets, their fair value is measured using valuation
techniques including the discounted cash flow (‘DCF’) model. The inputs to these models are taken from
observable markets where possible, but where this is not feasible, a degree of judgement is required
in establishing fair values. Judgements include considerations of inputs, such as liquidity risk, credit risk
and volatility.
2.2.16 Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Group determines the lease term as the non-cancellable term of the lease. Any periods covered by
an option to extend the lease is not considered unless it is reasonably certain to be exercised.
Right-of-use assets
The Group recognises ROU assets at the commencement date of the lease (i.e., the date the underlying asset
is available for use). ROU assets are measured at cost, less any accumulated depreciation and impairment
losses. ROU assets are depreciated on a straight-line basis over the shorter of the lease term and the
estimated useful life of the asset.
The ROU assets are also subject to impairment. Refer to the accounting policies in note 2.2.13 Impairment
of non-financial assets.
Lease liabilities
(1) Initial measurement
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value
of lease payments to be made over the lease term. There are no obligatory extension clauses in the rental
agreements. Although some lease contracts comprise the optional extension clauses, these are not included
on initial recognition because it is not always reasonably certain that the Group will take the option. In
calculating the present value of lease payments, ASA International uses the IBR at the lease commencement
date due to the reason that the interest rate implicit in the lease is not available. The IBR is calculated using
a reference rate (derived as country specific risk-free rate) and adjusting it with Company specific financing
spread and integrating lease specific factors. Refer to note 2.5.6 on accounting estimates and assumptions
used to determine the IBR rates.
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However, according to IFRS 17, the split of contracts is not permitted and the entire contract is required to
be accounted for either under IFRS 9 Financial Instruments or IFRS 17 Insurance Contracts. The Group has
applied the exemption under IFRS 17.8A on the basis that the compensation for an insured event is limited to
the amount required to settle the policyholder’s obligation created by the contract and therefore applied IFRS
9 in accounting for the entire loan contract. As these loans failed the SPPI test with the insurance component,
they are accounted for at FVTPL as per IFRS 9. The Group has decided to use the modified retrospective
approach as prescribed in the transition guidance in IFRS 9 and the loans are reclassified on 1 January 2023.
The prior year numbers have not been restated. The impact on the financial statements as on 1 January 2023
is as follows:
Consolidated statement of financial position
31 Dec 2022
USD’000
Impact
USD’000
01 Jan 2023
USD’000
Assets
Loans and advances to customers at amortised cost 331,898 (44,671) 287,227
Loans reclassified at FVTPL – 46,917 46,917
Total assets 331,898 2,246 334,144
Liabilities
Deferred income – DRF/MRF 146 (146) –
Total liabilities 146 (146) –
Total impact 2,392
The DRF/MRF were no longer included in the new loan contracts as from August 2023 in Uganda, September
2023 in the Philippines, November 2023 in Kenya, and January 2024 in Sri Lanka. The loans portfolio
classified at FVTPL only include loans in the Philippines (for 1st cycle loans), Uganda, Sri Lanka and Kenya
which were disbursed before cessation of the DRF/MRF. The fair value of these loans have been classified
as Level 3.
2.3.2 Definition of Accounting Estimates – Amendments to IAS 8
The amendments to IAS 8 clarify the distinction between changes in accounting estimates, and changes in
accounting policies and the correction of errors. They also clarify how entities use measurement techniques
and inputs to develop accounting estimates.
The amendments had no impact on the Group’s consolidated financial statements.
2.3.3 Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2
The amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements provide guidance
and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments
aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement
for entities to disclose their ‘significant’ accounting policies with a requirement to disclose their ‘material’
accounting policies and adding guidance on how entities apply the concept of materiality in making decisions
about accounting policy disclosures.
The amendments do not have any material impact on the accounting policy disclosures in the Group’s
consolidated financial statements.
2. Material accounting policies continued
2.3. New standards, interpretations and amendments adopted by the Group
The Group applied for the first time certain standards and amendments, which are effective for annual
periods beginning on or after 1 January 2023 (unless otherwise stated). The Group has not early adopted
any other standard, interpretation or amendment that has been issued but is not yet effective.
2.3.1 IFRS 17 Insurance Contracts
In May 2017, the International Accounting Standards Board (the ‘IASB’ or the ‘Board’) issued IFRS 17
Insurance Contracts (‘IFRS 17’), a comprehensive new accounting standard for insurance contracts covering
recognition and measurement, presentation and disclosure. IFRS 17 replaced IFRS 4 Insurance Contracts
(‘IFRS 4’) that was issued in 2005. IFRS 17 applies to all types of insurance contracts (i.e., life, non-life, direct
insurance and re-insurance), regardless of the type of entities that issue them, as well as to certain guarantees
and financial instruments with discretionary participation features. A few scope exceptions are applied. The
overall objective of IFRS 17 is to provide an accounting model for insurance contracts that is more useful and
consistent to entities issuing insurance contracts. In contrast to the requirements in IFRS 4, which are largely
based on grandfathering previous local accounting policies, IFRS 17 provides a comprehensive model for
insurance contracts, covering all relevant accounting aspects. The core of IFRS 17 is the general model,
supplemented by:
• A specific adaptation for contracts with direct participation features (the variable fee approach).
• A simplified approach (the premium allocation approach) mainly for short-duration contracts.
During the assessment of the applicability of IFRS 17, the Group has identified a particular component
concerning the determination of some loans as an insurance contract according to the requirements outlined
in IFRS 17. IFRS 17 defines an insurance contract as ‘a contract under which one party (the issuer) accepts
significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder
if a specified uncertain future event (the insured event) adversely affects the policyholder.’
The Group charges a 1%-2% upfront premium fee on its loans disbursed to customers under Death Risk Fund/
Multipurpose Risk Fund (‘DRF/MRF’) schemes in the Philippines, Uganda, Sri Lanka and Kenya. In return,
outstanding loans (including interest receivables) shall be exempted/waived in case of a customer’s death or
disability. Moreover, and voluntarily, certain additional benefits may be paid for funeral/financial assistances.
These additional benefits are discretionary,corporate social responsibility centric and do not constitute any
obligation to the entities.
Previously, as per IFRS 4, splitting of contracts was allowed. This particular component was split from the rest
of the contracts and accounted under IFRS 4. The loan contract along with other components passed the SPPI
test and was accounted for under IFRS 9 as amortised cost .
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2.4.1 Classification of Liabilities as Current or Non-Current and Non-current Liabilities with Covenants
(Amendments to IAS 1)
The amendments, as issued in 2020 and 2022, aim to clarify the requirements on determining whether a
liability is current or non-current, and require new disclosures for non-current liabilities that are subject to
future covenants. The amendments apply for annual reporting periods beginning on or after 1 January 2024.
The Group is in the process of making a distinction between current and non-current assets and liabilities
for the consolidated financial statements of 2024.
2.5 Significant accounting judgements and estimates
In the process of applying the Group’s accounting policies, judgements and estimates are applied in
determining the amounts recognised in the financial statements. Significant use of judgements and estimates
are as follows:
2.5.1 Allowance for ECL on loans and advances
The Group calculates the allowance for ECL in a three step process as described below under A to D. The
Group reviews its loans at each reporting date to assess the adequacy of the ECL as recorded in the financial
statements. In particular, judgement is required in the estimation of the amount and timing of future cash
flows when determining the level of allowance required. Such estimates are based on certain assumptions
such as the financial situation of the borrowers, types of loan, maturity of the loans, ageing of the portfolio,
economic factors etc. The actual performance of loans may differ from such estimates resulting in future
changes to the allowance. Due to the nature of the industry in which the Group operates, i.e. micro credit to
low-income clients, the loan portfolio consists of a very high number of individual customers with low value
exposures. These characteristics lead the Group to use a provisioning methodology based on a collective
assessment of similar loans. The Group’s policy for calculating the allowance for ECL is described below:
A) Determination of loan staging
The Group monitors the changes in credit risk in order to allocate the exposure to the correct staging bucket.
Given the nature of the Group’s loan exposures (generally short term exposures, <12 months) no distinction
has been made between stage 1 (12 months ECL) and stage 2 loans (lifetime ECL) for calculating the ECL
provision. The current and loans overdue below 31 days are considered as stage 1. Any loans overdue for
31–90 days are recognised as stage 2 loans. Loans overdue more than 90 days are recognised as stage 3 loans.
Overdue age Staging
Bucket based on overdue age
Current
Stage 1
1–30 days
31–90 days Stage 2
> 90 days Stage 3
2. Material accounting policies continued
2.3. New standards, interpretations and amendments adopted by the Group
2.3.4 Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments
to IAS 12
The amendments to IAS 12 Income Tax narrow the scope of the initial recognition exception, so that it
no longer applies to transactions that give rise to equal taxable and deductible temporary differences such
as leases and decommissioning liabilities.
The amendments had no impact on the Group’s financial statements.
2.3.5 Pillar two model rules – Amendments to IAS 12
On 23 May 2023, the IASB issued International Tax Reform—Pillar Two Model Rules – Amendments to IAS 12
(the Amendments) to clarify the application of IAS 12 Income Taxes to income taxes arising from tax law
enacted or substantively enacted to implement the Organisation for Economic Co-operation and
Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) Pillar Two model
rules (Pillar Two income taxes). The Amendments introduce:
• A mandatory temporary exception to the accounting for deferred taxes arising from the jurisdictional
implementation of the Pillar Two model rules; and
• Disclosure requirements for affected entities to help users of the financial statements better understand
an entity’s exposure to Pillar Two income taxes arising from that legislation, particularly before its effective
date.
IAS 12 is amended to add the exception to recognising and disclosing information about deferred tax assets
and liabilities that are related to tax law enacted or substantively enacted to implement the Pillar Two model
rules published by the OECD (the “Pillar Two legislation”). The amendments require that entities shall apply the
amendments immediately upon issuance. The amendments also require that entities shall disclose separately
its current tax expense/ income related to Pillar Two income taxes, and the qualitative and quantitative
information about its exposure to Pillar Two income taxes in periods in which the Pillar Two legislation is
enacted or substantially enacted but not yet in effect in annual reporting periods beginning on or after
1 January 2023.
ASAI’s consolidated revenue has not crossed the minimum threshold and its entities’ effective tax rates are
more than the minimum tax rate i.e., 15%.
The Two Pillar legislation and the amendments had no impact on the Group’s consolidated financial
statements as the entity is out of scope of Pillar two regulations.
2.4 Standards issued but 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 Group’s financial statements are disclosed below. The Group intends to adopt these new
and amended standards and interpretations, if applicable, when they become effective .
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D) Management overlay
The Group considers to take additional ECL provision as management overlay to reflect the impact of all
possible risk exposures which are not covered under A–C above. The impact of the economic crisis, inflation
etc. are being captured by loan ageing. Hence, no additional management overlay is taken on the own
portfolio in 2023 as well as in 2022. However, the Group has taken a management overlay of USD 837K for
the off-book BC portfolio with Jana Small Finance Bank (‘JSFB’) in 2023 due to the recent start of this BC
portfolio and therefore lack of historical credit information. A significant write off occurred in 2023 and 2022
in Myanmar, in the events of military take over and delayed Covid impact. Hence, a 60% haircut has been
applied in case of Myanmar for both ECL for historical default and ECL for forward consideration.
E) Impact of macro-economic indicators
The Group provides small loans to clients who are not employed but operate their own small businesses in the
informal sector and are less impacted by macro-economic trends than other business sectors. In addition, the
Group’s loans average six months until maturity at the year-end and so the impact of macro-economic factors
on the repayment of loans is inherently limited. Hence, the management concluded that changes in macro-
economic indicators do not have any direct correlation with the ASA business model and therefore, no
adjustment was made to consider forecasts for such macro-economic indicators in the forward-looking
element of its expected credit loss provision calculation.
F) Impact of climate change
The Group and its customers are exposed to the physical risks from climate change and risks of transitioning
to a net-zero economy. Most climate-related physical risks are expected to manifest over a term that is
generally much longer than the maturity of most of the outstanding exposures. The following balances may
be impacted by physical and transition risks.
The Group has identified the ECL provision as one of the main areas in which it could be exposed to the
financial impacts of climate change risk, as a number of the Group’s operating areas are prone to natural
disasters such as typhoons, flash floods or droughts. The Group’s ECL model captures the expected impact
of the climate related risks through the historical loss data that feeds the model, which also includes write-
offs due to such natural disasters. In addition, management monitors the situation in each of its operating
territories post the balance sheet date for any factors that should be considered in its year-end ECL
calculations. As the Group’s loans are short-term, the impact of such events over the life of the loans would
naturally be limited. Hence, no additional changes have been made in the existing model on account of climate
related risks. However, given the evolving risks associated with climate change, management will continue
to monitor whether adjustments to its ECL models are required for future periods .
2. Material accounting policies continued
2.5 Significant accounting judgements and estimates continued
2.5.1 Allowance for ECL on loans and advances continued
B) Calculating ECL for stage 1–2 loans
To avoid the complexity of calculating the separate probabilities of default and loss-given default, the Group
uses a ‘loss rate approach’ for the measurement of ECLs under IFRS 9. Using this approach, the Group
developed loss-rate statistics on the basis of the net amounts written off over the last five years (Gross
write-off less subsequent recovery). The historical loss rates include the impact of security deposits held
by the Group, which is adjusted with overdue amounts before loans are written off. ECL recorded purely
based on historical loss comes to USD 0.9 million (2022: USD 1.5 million) on loans under stage 1 and stage 2.
If there were a relative increase in the loss rate of 1%, the ECL requirement would rise by USD 9K.
The forward-looking element of the ECL model is constructed through looking at the trend in net write-off
information from the prior three years and applying a projected loss rate in order to anticipate future loss
events. ECL as per the forward-looking element comes to USD 637K (2022: USD 479K). Changing the
write-off trend to two years, rather than three years for the forward-looking assessment, would reduce
ECL by USD 513K.
C) Calculating ECL for stage 3 loans
The Group considers a loan to be credit impaired when it is overdue for more than 90 days. The ECL applied
to net stage 3 loans (after adjusting the security deposit which is held as collateral in certain countries) is
at a rate below:
Overdue age
Loss %
2023 2022
91-180 days 50 and 80% 50 and 80%
181-365 days 70 and 100% 70 and 100%
Over 365 days 100% 100%
In 2023, management considered a higher loss rate (80% for the loans bucketed between 91-180 days and
100% for loans over 180 days overdue) in India, Myanmar, Pakistan, Nigeria, the Philippines, Sri Lanka,
Tanzania, Sierra Leone and Zambia in view of operating challenges faced in these countries on account of high
Portfolio at Risk (‘PAR’), market challenges and political instability which might led to reduction in recoveries.
In other countries, the loss rates considered are 50% for the loans bucketed between 91–180 days and 70%
for loans over 180 days overdue. In 2022, higher loss rates (80% for the loans bucketed between 91–180 days
and 100% for loans over 180 days overdue) were considered for India, Myanmar, Nigeria, Sri Lanka and
Sierra Leone.
Based on the above, ECL for stage 3 loans comes to USD 5.2 million (2022: USD 13.1 million). An alternative
assessment of stage 3 provisions would be to apply a 100% loss rate across the entire stage 3 population (net
of security deposit), being all loans more than 90 days past due. This would increase the ECL on the stage 3
population to USD 5.3 million .
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Based on the above assessment the total provision for ECLs for loans and advances to customers can be
summarised as follows:
Particulars
2023 2022
Own
portfolio
USD’000
Off-book
portfolio
USD’000
Interest
receivable
USD’000
Own
portfolio
USD’000
Off-book
portfolio
USD’000
Interest
receivable
USD’000
ECL as per historical default rate 869 177 30 1,521 400 75
Forward considerations 637 159 15 479 492 21
ECL under stage 3 loans 5,181 255 180 13,197 146 607
Management overlay – 837 – – – –
6,687 1,428 225 15,197 1,038 703
Allocated to:
2023 2022
Gross
outstanding
USD’000
ECL
USD’000 Coverage
Gross
outstanding
USD’000
ECL
USD’000 Coverage
Own Portfolio (note 13.1
and 13.3) 305,248 6,687 2% 344,985 15,197 4%
Off-book BC portfolio
(note 13.2 and note 28) 38,796 1,428 4% 21,362 1,038 5%
Interest receivable
(note 13.1 and note 13.3) 4,464 225 5% 7,265 703 10%
348,508 8,340 2% 373,612 16,938 5%
2. Material accounting policies continued
2.5 Significant accounting judgements and estimates continued
2.5.1 Allowance for ECL on loans and advances continued
G) Business Correspondence (‘BC’) portfolio, Direct Assignment (‘DA’) Portfolio and Securitisation portfolio
of ASA India
A similar assessment has been performed for the off–book BC portfolio of ASA India (see note 13 for details
on the BC portfolio). The off– book BC portfolio consists of disbursements on behalf of IDFC First Bank
(‘IDFC’), JSFB and Fincare Small Finance Bank Limited (‘Fincare’). IDFC BC and Fincare are subject to a
maximum provision of 5% of Outstanding Loan Portfolio (‘OLP’), which is the maximum credit risk exposure
for ASA India as per the agreement with IDFC First Bank and Fincare. There is no maximum risk on BC from
JSFB. Those portfolios are assessed in line with ASA India’s own OLP. ECL for the off-book BC portfolio comes
to USD 1.4 million (2022: 1.0 million).
The portion of the DA portfolio of ASA India which is on-book has also been treated the same as regular
portfolio. No provision for the off- book portion of the DA portfolio was made because, as per the agreement
with the State Bank of India, ASA India has no credit risk on this part of the DA portfolio.
The Securitisation portfolio of ASA India has been assessed in line with ASA India’s own portfolio.
H) ECL on interest receivable
ECL for Interest receivable is assessed in the same line as OLP. ECL for interest receivable comes to USD 225K
(2022: 703K).
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2.5.4 BC and partnership models
The portfolios under the Business correspondence and partnership models in ASA India (‘BC model’) are
recognised on the statement of financial position based on whether the entity has the right to receive
rewards. ASA India operates a Business Correspondent and partnership model with IDFC First Bank (‘IDFC’)
and Jana Small Finance Bank (‘JSFB’) . ASA India operates as an agent, whereby ASA India selects borrowers
based on the selection criteria of the BC Partner.
The loans to borrowers of IDFC and JSFB and related funding are not recognised on the balance sheet since
the loan agreements are made between the partners and the borrowers or the risk exposure related to the
loans are capped at 5%. More information is available in note 13.
2.5.5 Direct Assignment
ASA India entered into two Direct Assignment agreements (DA) with State Bank of India (SBI), through which
the entity has sold a pool of customers’ loans amounting to USD 16.5 million against a purchase consideration
of USD 14 million. The balance (15%) is kept as minimum retention as per guidelines issued by the Reserve
Bank of India (RBI). Based on the agreements, 85% of the loans are derecognised on the books on the grounds
that the entity transferred substantially all the risks and rewards of ownership of financial assets. 15%
remained on- book. Further information is available in note 13 .
The parameter most subject to change is the discount rate. Management engages third-party actuaries to
conduct the valuation. The defined benefit costs have been disclosed in note 8.2. The sensitivity analysis of
the plan on account of any change in discount rate and salary increment is disclosed in note 8.3. Sensitivity
analysis for changes in the other two assumptions were not done as the effect is determined immaterial.
2.5.3 Liability for death risk and multi-purpose risk fund
At the end of 2023, the balance of the DRF and MRF is zero as the related loans are measured at FVTPL from
1 January 2023. Mortality risk is included in the fair value measurement. At the end of 2022, management
used significant assumptions to reassess the adequacy of the liability to be provided. These include estimating
the number of borrower deaths among the total number of borrowers by applying the local mortality rates at
the end of that year, outstanding loan amount per borrower and other financial assistance to the family where
applicable. The mortality rate is based on historical mortality rates of the borrower for last three years for the
specific countries. As of December 2022, rates were 0.36 % in Sri Lanka, 0.21% in Uganda, 0.43% in the
Philippines and 0.24% in Kenya .
2. Material accounting policies continued
2.5 Significant accounting judgements and estimates continued
2.5.2 Defined benefit plans
The cost of the defined benefit plan is determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the
determination of the discount rate, future salary increases, staff turnover and retirement age. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive
to changes in these assumptions. All assumptions are reviewed at each reporting date.
The assumptions used in December 2023 and December 2022 are as follows:
Assumptions defined benefit plan:
2023 2022
Lak Jaya
ASA
Pakistan ASA India ASA Nigeria ASA Kenya PPFC Lak Jaya
ASA
Pakistan ASA India ASA Nigeria ASA Kenya PPFC
Discount rate 13.7% 15.5% 7.4% 16.5% 15.8% 6.6% 18.7% 14.5% 7.4% 14.3% 14.0% 7.4%
Salary increment 5.0% 14.5% 9.0% 14.0% 13.8% 5.0% 10.0% 13.5% 9.0% 12.0% 12.0% 5.0%
Staff turnover 16.0% 14.3% 6.1% 5.0% 7.1% 44.0% 15.7% 14.0% 22.0% 5.0% 12.0% 38.1%
Retirement age 60 Years 60 Years 60–65 Years 60 Years 60 Years 60 Years 60 Years 60 Years 60–62 Years 60 Years 60 Years 60 Years
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The Group used country sovereign rates to determine the risk-free rate. If no sovereign risk-free rate is
available, a build-up approach is applied that adjusts the USD based United States Treasury bond for (i) the
country risk premium, to capture country specific risk, and (ii) the long-term inflation differential, to capture
any currency risk.
The Group specific financing spread is determined based on (i) the Group specific perspective/ credit rating,
(ii) the credit rating of the legal entities (lessees) of ASA International, and (iii) the market interest rates/ yields
on industry specific bonds.
The lease specific adjustment depends on the type/ nature of asset, and relates to the fact that a secured
bond will have a lower yield compared to an unsecured bond. However, the yield difference varies based on
the type/ nature of the asset that is used as collateral. The IBR used for different entities in 2023 and 2022
are as follows :
2. Material accounting policies continued
2.5 Significant accounting judgements and estimates continued
2.5.6 Leases – estimating the IBR
The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with
a similar security, the funds necessary to obtain an asset of a similar value to the ROU asset in a similar
economic environment.
The Group applied a discount rate per country based on leases with similar characteristics applying a portfolio
approach instead of a lease- by-lease approach which had no material impact for the Group. The starting point
for estimating the reference rate is the local risk-free rate. The Group developed an approach to determine
IBR that is closely aligned with the definitions and requirements prescribed in IFRS 16. In this approach the
Group first determined the country risk free rate and adjusted that with the Group specific financing spread
and lease specific adjustments to consider IBR rates .
Country
Lease
Currency
Credit
Rating
Approach
reference rate
2023 2022
IBR at different lease duration (year) IBR at different lease duration (year)
Tenure of lease 1 2-4 5-6 7-9 1 2-4 5-6 7-9
Ghana GHS BBB Local 27.8% 27.2% 23.4% 20.1% 16.7% 20.3% 21.4% 22.3%
Nigeria NGN BBB Local 10.2% 12.4% 14.3% 15.3% 5.5% 9.0% 11.5% 12.5%
Sierra Leone SLE BB+ Build–Up 34.5% 33.4% 32.7% 32.6% 14.8% 15.4% 15.8% 16.0%
Kenya KES BB– Local 14.5% 15.9% 16.8% 17.0% 9.3% 10.5% 12.1% 12.7%
Rwanda RWF B+ Build–Up 19.6% 18.6% 18.0% 17.9% 10.1% 10.7% 11.2% 11.3%
Tanzania TZS BBB– Local 9.2% 9.4% 10.1% 11.1% 7.4% 8.3% 9.4% 10.5%
Uganda UGX BB– Local 14.2% 15.4% 16.3% 16.9% 10.5% 13.0% 15.2% 16.0%
Zambia ZMW BB– Local 22.5% 24.2% 25.8% 27.5% 25.0% 25.0% 25.0% 25.0%
Bangladesh BDT BBB– Local 10.1% 10.2% 10.4% 10.5% 3.4% 5.3% 6.7% 7.2%
India INR BB Local 8.7% 8.8% 8.8% 8.9% 4.4% 5.4% 6.1% 6.4%
Pakistan PKR BBB Local 23.0% 19.8% 17.5% 16.6% 7.9% 10.8% 11.5% 12.3%
Sri Lanka LKR BB Local 28.4% 26.9% 24.2% 22.6% 8.7% 9.8% 11.7% 12.1%
Myanmar MMK BBB– Build–Up 29.7% 28.6% 28.0% 27.9% 17.0% 17.7% 18.1% 18.3%
Philippines PHP BBB– Local 7.8% 7.7% 7.5% 7.7% 1.7% 3.0% 4.0% 4.5%
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Financial Statements
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Financial Statements
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2.5.8 Hyperinflation
Under IAS 29, ‘Financial Reporting in Hyperinflationary Economies’, consolidated financial statements
prepared based on historical cost must be adjusted with the current purchasing power when operations are
in an economy with hyperinflation. This involves applying a general price index that enables the financial
information of the subsidiaries operating in a hyperinflationary economy to be presented in the measuring
unit in force at the reporting date. All non-monetary assets and liabilities of the subsidiaries operating in a
hyperinflationary economy must therefore be adjusted for inflation in order to reflect changes in purchasing
power at the reporting date. Similarly, the income statement is adjusted for inflation during the period.
Monetary items do not need to be restated/adjusted as they already reflect purchasing power at the
reporting date.
IAS 29 does not establish an absolute rate at which hyperinflation is deemed to arise. It is a matter of
judgement when restatement of financial statements in accordance with this Standard becomes necessary.
One of the key quantitative indicators is that, the cumulative inflation rate over three years is approaching,
or exceeds, 100%.
ASA International operates in thirteen countries across Asia and Africa, and monitors the inflation rates
in an inflation dashboard which is used as one indication of the existence of hyperinflation, together with
an assessment of other economic conditions.
Ghana and Sierra Leone have exceeded the three year cumulative rate of inflation of 100% by the end of
2023. The general price index used by ASAI for purposes of measuring inflation movements is the Consumer
Price Index (‘CPI’) of the specific country and is obtained from the International Monetary Fund World
Economic Outlook Database.
Ghana
By the third quarter of 2023, the cumulative three year CPI increased to 100% and is expected to continue
increasing. As of 31 December 2023, Ghana has been classified as a hyperinflationary economy. IAS 29 is
therefore applicable to ASAI entities operating in Ghana. In Ghana, ASAI has two entities – ASA Savings and
Loans Limited and ASA Dwaso Limited on the application of IAS 29 to ASA Ghana, a cumulative inflation
factor has been applied using the consumer price index (‘CPI’) in Ghana, published by the Ghana Statistical
Services. The movement in the CPI for the Period was 25% (2022: 52%).
Sierra Leone
The cumulative inflation over the past three years exceeded 100% by the third quarter of 2023. As of
31 December 2023, Sierra Leone has been classified as hyperinflationary economy. IAS 29 is therefore
applicable to ASA Microfinance (Sierra Leone) on the application of IAS 29 to ASA Sierra Leone, a cumulative
inflation factor has been applied using the CPI in Sierra Leone, published by Statistics Sierra Leone. The
movement in the CPI for the Period was 53% (2022: 36%).
2. Material accounting policies continued
2.5 Significant accounting judgments and estimates continued
2.5.7 Taxes
Deferred tax assets
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit
will be available against which the losses can be utilised. Significant management judgement is required to
determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the
level of future taxable profits, together with future tax planning strategies.
In assessing the probability of recovery, the Group has used its five-year business plan which is consistent
with last year’s assessment. This business plan was also used for the Going concern and Viability assessment.
As at 31 December, the gross amount and expiry dates of losses available for carry forward are as follows:
2023
Expiring
within
1 year
Expiring
within
2-5 years
Expiring
beyond
5 years Unlimited Total
Losses for which Deferred tax asset
is recognised – – 86 – 86
Losses for which Deferred tax asset
is not recognised 1,455 4,120 36,645 31,620 73,840
1,455 4,120 36,731 31,620 73,926
2022
Expiring
within
1 year
Expiring
within
2-5 years
Expiring
beyond
5 years Unlimited Total
Losses for which Deferred tax asset
is recognised – – – – –
Losses for which Deferred tax asset
is not recognised – 3,409 24,972 27,058 55,439
– 3,409 24,972 27,058 55,439
If the Group was able to recognise all unrecognised deferred tax assets, profit and equity would have
increased by USD 17.1 million (2022: 13.0 million).
Deferred tax liabilities
As of 31 December 2023, the Group has undistributed profits in its subsidiaries amounting to USD 56.9
million. The Group recognised a deferred tax liability amounting to USD 2.1 million (see note 11.3) on USD
23.3 million of undistributed profits on the assessment that these will be distributed in the foreseeable future.
No deferred tax liability was recognised on the balance of USD 33.6 million due to regulatory uncertainty on
when those can be distributed. If the Group recognises a deferred tax liability on these profits, profit and
equity would decrease by USD 3.7 million .
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2. Material accounting policies continued
2.5 Significant accounting judgments and estimates continued
2.5.8 Hyperinflation continued
The application of IAS 29 includes the following adjustments:
• Adjustment of historical cost non-monetary assets, liabilities and stated capital for the change in
purchasing power caused by inflation from the date of initial recognition or contribution to the balance
sheet date;
• Adjustment or contribution of the income statement for inflation during the year;
• The income statement is translated at the year-end foreign exchange rate instead of a monthly average
rate;
• A net monetary gain or loss adjustment, recognised in the income statement, to reflect the impact
of inflation on holding monetary assets and liabilities in local currency; and
• Adjustment in the cash flow statement to reflect the current purchasing power.
On first application of hyperinflationary accounting, there is an accounting policy choice of (i) restate
comparatives or (ii) do not restate comparatives. ASAI has opted to take the approach not to restate
the comparatives.
The impact of the implementation of IAS 29 in the consolidated financial statements of the Group
is as follows:
1 January 2023
Before
adjustment
USD’000
Impact
of IAS 29
adjustment
USD’000
After
adjustment
USD’000
Total equit y 89,661 256 89,917
31 Dec 2023
Before
adjustment
USD’000
Impact
of IAS 29
adjustment
USD’000
After
adjustment
USD’000
Total assets 489,302 725 490,027
Total liabilities 413,286 131 413,417
Total equit y 76,016 594 76,610
2023
Before
adjustment
USD’000
Impact
of IAS 29
adjustment
USD’000
After
adjustment
USD’000
Profit for the period 14,172 (5,415) 8,757
Total comprehensive income/(loss) (16,037) 26 (16,011)
Break-down of P&L impact for IAS 29:
Loss on net monetary position (5,789)
Impact of CPI adjustment on other P&L items 374
Total impact of IAS 29 adjustment on net profit (5,415)
A net monetary loss of USD 5.8 million is recognised in the income statement, to reflect the impact of inflation
and exchange rate movement on holding monetary assets and liabilities in local currency in the subsidiaries
in Ghana and Sierra Leone. A contribution of USD 374K is recognised in P&L resulting from the adjustment
of P&L items to the current purchasing power.
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2. Material accounting policies continued
2.5 Significant accounting judgments and estimates continued
Summary of material judgements and estimates
Policy Judgements Estimates Note ref.
Allowance
for ECL on
loans and
advances
• Identification of staging of the loan
portfolio.
• Criteria for a significant increase in
credit risk.
• Identification of credit-impaired loans.
• Monitoring impact of climate change.
• Back-testing based on the
historical default trend.
• Forward-looking considerations.
• Management overlay.
2.5.1
Defined
benefit plans
• Changes in assumptions. • Determination of discounting rate.
• Salary increment rate.
• Staff turnover.
2.5.2
BC and
partnership
models
• Recognition of the IDFC portfolio as
off-book because the credit risk is limited
to 5% of the portfolio.
• ECL related to the BC loans. 2.5.4
and
2.5.1
Direct
Assignment
• Whether the transfer constitutes a sale
and whether all risk and rewards of
ownership have been transferred.
• ECL related to the DA loans
retained by ASA India.
2.5.5
Leases
– estimating
the IBR
• Determining whether a contract contains
a lease under IFRS 16.
• IBR used to the calculation of
ROU assets and lease liabilities.
2.5.6
Deferred
Tax Assets
• Determining whether it is probable
that future profit will be available
to utilise DTA.
• Estimating the amount of DTA
based on timing and likelihood
of future taxable profit.
• Estimation of future tax rates
for DTA.
2.5.7
Deferred
Tax Liability
• Determination whether there are any
constraints or regulatory restrictions
to distribute retained earnings as dividend.
• Estimating the amount of DTL
based on timing and likelihood
of future taxable amount and
undistributed dividends from
subsidiaries.
• Estimation of future tax rates
for DTL.
2.5.7
Hyperinflation • Determining whether the economy
of a country meets the criteria for
hyperinflation as per IAS 29.
• Selection of appropriate sources for CPIs.
• Estimation of daily CPI rates. 2.5.8
3. Segment information
For management purposes, the Group is organised into reportable segments based on its geographical areas
and has five reportable segments, as follows:
• West Africa, which includes Ghana, Nigeria and Sierra Leone.
• East Africa, which includes Kenya, Uganda, Tanzania, Rwanda and Zambia.
• South Asia, which includes India, Pakistan and Sri Lanka.
• South East Asia, which includes Myanmar and the Philippines.
• Holding and other non-operating entities, which includes holding entities and other entities without
microfinance activities.
No operating segments have been aggregated to form the above reportable operating segments. The
Company primarily provides only one type of service to its microfinance clients being small microfinance loans
which are managed under the same ASA Model in all countries. The reportable operating segments have been
identified on the basis of organisational overlap like common Board members, regional management structure
and cultural and political similarity due to their geographical proximity to each other.
The Executive Committee is the Chief Operating Decision Maker (CODM) and monitors the operating results
of its reportable segments separately for the purpose of making decisions about resource allocation and
performance assessment. Segment performance is evaluated based on operational profits and losses and is
measured consistently with profit or loss in the consolidated financial statements. Transfer prices between
operating and non-operating segments are on an arm’s length basis in a manner similar to transactions with
third parties and are based on the Group’s transfer pricing framework.
Revenues and expenses as well as assets and liabilities of those entities that are not assigned to the four
reportable operating segments are reported under ‘Holding and other non-operating entities’. Inter-segment
revenues, expenses and balance sheet items are eliminated on consolidation.
No revenue from transactions with a single external customer or counterparty amounted to 10% or more
of the Group’s total revenue in 2023 or 2022.
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3. Segment information continued
The following table presents operating income and profit information for the Group’s operating segments for the year ended 31 December 2023.
As at 31 December 2023
West Africa
USD’000
East Africa
USD’000
South Asia
USD’000
South East Asia
USD’000
Holding and
other
non-operating
entities
USD’000
Total
segments
USD’000
Adjustments
and
eliminations
USD’000
Consolidated
USD’000
External interest and similar income 46,767 54,629 41,806 33,399 9 176,610 – 176,610
Inter-segment interest income – – – 406 629 1,035 (1,035) –
External interest expense (2,260) (11,169) (12,305) (6,251) (5,771) (37,756) – (37,756)
Inter-segment interest expense (266) (90) (149) (150) (380) (1,035) 1,035 –
Net interest income 44,241 43,370 29,352 27,404 (5,513) 138,854 – 138,854
External other operating income 452 1,116 2,574 5,010 197 9,349 – 9,349
Inter-segment other operating income
1
– – – – 35,226 35,226 (35,226) –
Other inter-segment expense (382) (3,958) (390) (3,177) 357 (7,550) 7,550 –
Total operating income 44,311 40,528 31,536 29,237 30,267 175,879 (27,676) 148,203
Credit loss expense (3,716) (793) 423 (938) – (5,024) – (5,024)
Net operating income 40,595 39,735 31,959 28,299 30,267 170,855 (27,676) 143,179
Personnel expenses (11,686) (16,953) (15,444) (11,682) (6,394) (62,159) – (62,159)
Exchange rate differences (730) (272) (180) (20) (766) (1,968) – (1,968)
Depreciation of property and equipment (315) (566) (536) (317) (136) (1,870) – (1,870)
Amortisation of ROU assets (775) (1,062) (703) (1,114) (68) (3,722) – (3,722)
Other operating expenses (6,806) (9,023) (5,075) (10,539) (4,033) (35,476) – (35,476)
Gain/ (loss) on net monetary position (5,651) – – – (138) (5,789) – (5,789)
Tax expenses (7,118) (5,078) (6,723) (1,251) (3,268) (23,438) – (23,438)
Segment profit after tax 7,514 6,781 3,298 3,376 15,464 36,433 (27,676) 8,757
Total assets 89,494 139,762 102,803 119,510 197,518 649,087 (159,060) 490,027
Total liabilities 47,582 111,403 77,808 105,169 79,472 421,434 (8,017) 413,417
Explanation: Segment profit is net profit after tax.
1 Inter-segment operating income includes intercompany dividends, transfer pricing charges and share in results of the subsidiaries .
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3. Segment information continued
The following table presents operating income and profit information for the Group’s operating segments for the year ended 31 December 2022.
As at 31 December 2022
West Africa
USD’000
East Africa
USD’000
South Asia
USD’000
South East Asia
USD’000
Holding and
other
non-operating
entities
USD’000
Total
segments
USD’000
Adjustments
and
eliminations
USD’000
Consolidated
USD’000
External interest and similar income 54,178 43,165 49,058 31,566 12 177,979 – 177,979
Inter-segment interest income – – – 19 774 793 (793) –
External interest expense (2,788) (8,761) (19,043) (5,393) (4,337) (40,322) – (40,322)
Inter-segment interest expense (276) (282) (70) (146) (19) (793) 793 –
Net interest income 51,114 34,122 29,945 26,046 (3,570) 137,657 – 137,657
External other operating income 548 2,837 2,554 4,369 43 10,351 – 10,351
Inter-segment other operating income
1
– – – – 44,273 44,273 (44,273) –
Other inter-segment expense (428) (2,246) (306) (1,943) 3 (4,920) 4,920 –
Total operating income 51,234 34,713 32,193 28,472 40,749 187,361 (39,353) 148,008
Credit loss expense (2,868) 501 2,876 (1,143) (9) (643) – (643)
Net operating income 48,366 35,214 35,069 27,329 40,740 186,718 (39,353) 147,365
Personnel expenses (13,332) (15,227) (15,616) (10,611) (5,689) (60,475) – (60,475)
Exchange rate differences 206 (37) (259) (614) (855) (1,559) – (1,559)
Depreciation of property and equipment (293) (741) (332) (288) (162) (1,816) – (1,816)
Amortisation of ROU assets (687) (1,126) (1,031) (1,011) (76) (3,931) – (3,931)
Other operating expenses (6,461) (6,842) (5,436) (10,588) (3,976) (33,303) – (33,303)
Tax expenses (8,584) (4,328) (9,292) (2,307) (3,883) (28,394) – (28,394)
Segment profit after tax 19,215 6,913 3,103 1,910 26,099 57,240 (39,353) 17,887
Total assets 108,395 113,791 133,894 102,917 199,363 658,360 (168,608) 489,752
Total liabilities 53,804 87,346 100,501 87,937 82,808 412,396 (12,305) 400,091
Explanation: Segment profit is net profit after tax.
1 Inter-segment operating income includes intercompany dividends, transfer pricing charges and share in results of the subsidiaries.
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5. Interest and similar expense
Included in interest and similar expense are accruals for interest payments to customers and other charges
from banks.
Notes
2023
USD’000
2022
USD’000
Interest expense on loans (30,841) (31,565)
Interest expense on security deposits and others (3,707) (3,788)
Interest expense on lease liability (341) (299)
Commitment and processing fees (114) (274)
Amortisation of forward points of forward contracts and
currency basis spread of swap contracts 37. (2,753) (4,396)
(37,756) (40,322)
6. Other operating income
2023
USD’000
2022
USD’000
Members’ admission fees 1,718 1,875
Document, application and verification fees 2,131 928
Proceeds from sale of pass-books 152 141
Income from DRFs and MRFs 1,068 3,743
Service fees income from off-book BC model (ASA India) 2,160 2,045
Distribution fee MBA Philippines 1,104 890
Other 1,016 729
9,349 10,351
Other includes a number of small items that are smaller than USD 150K on an individual basis.
4. Interest and similar income
Interest and similar income consists of interest income on microfinance loans to customers, and interest
income on bank balances and fixed-term deposits.
Notes
2023
USD’000
2022
USD’000
Interest income calculated using EIR 4.1. 147,410 173,856
Other interest and similar income 4.2. 29,200 4,123
176,610 177,979
4.1. Interest income calculated using EIR
2023
USD’000
2022
USD’000
Interest income on loans and advances to customers 135,730 161,176
Loan processing fees 11,680 12,680
147,410 173,856
Interest income decreased from last year in USD terms mostly due to devaluation of local currency against
USD in most of the operating subsidiaries and reclassification of interest income on loans at FVTPL.
4.2 Other interest and similar income
2023
USD’000
2022
USD’000
Interest income on short-term deposits 3,097 3,916
Fair value movement of financial assets at FVTPL 26,064 –
Other interest income 39 207
29,200 4,123
Interest income of loans reclassified to FVTPL for Kenya, Uganda, Sri Lanka and the Philippines has been
recognised under fair value movement of financial assets at FVTPL.
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8. Personnel expenses
Personnel expenses include total base salary expenses and employee benefit plans:
Notes
2023
USD’000
2022
USD’000
Personnel expenses (55,202) (55,253)
Defined contribution plans (4,277) (4,221)
Defined benefit plans 8.2. (2,680) (1,001)
(62,159) (60,475)
8.1. Retirement benefit liability
Notes
2023
USD’000
2022
USD’000
Retirement benefit liability as at beginning of period 4,593 5,391
Payments made during the period (700) (572)
Charge for the period 8.2. 2,680 1,001
Actuarial gains and losses on defined benefit liabilities (OCI) (448) (470)
Foreign exchange differences (1,287) (757)
Retirement benefit liability as at end of the period 4,838 4,593
ASA India, ASA Pakistan, Lak Jaya, Pagasa Philippines, ASA Nigeria, ASA Kenya, ASA Zambia, ASA Sierra
Leone and AMSL are maintaining defined benefit pension plans in the form of gratuity plans at retirement,
death, incapacitation and termination of employment for eligible employees. The funds for the plans in ASA
Pakistan, Pagasa Philippines, Lak Jaya, ASA Nigeria , ASA Kenya, ASA Zambia, ASA Sierra Leone and AMSL
are maintained by the entity itself and no plan assets have been established separately. The funds for the
plan of ASA India are being maintained with Life Insurance Corporation of India and the entity’s obligation is
determined by actuarial valuation. There are no other post-retirement benefit plans available to the employees
of the Group .
8.2. Charge for the period
2023
USD’000
2022
USD’000
Current service cost for the period (1,061) (459)
Past service cost (1,129) (45)
Interest cost for the period (490) (497)
(2,680) (1,001)
7. Expected credit loss expense
Notes
2023
USD’000
2022
USD’000
ECL on loans and advances to customers 13.3. (5,804) (4,847)
Impairment on bank and intercompany – 13
ECL on interest receivable (174) 368
Other expected credit loss expense (3,148) (1,294)
Recovery of previously written off loans 4,102 5,117
(5,024) (643)
The Group’s ECL expenses in 2023 increased compared to last year mainly due to deterioration of portfolio
quality in Nigeria, India and the Philippines. The key assumptions applied for the ECL provision and related
expense are explained in note 2.5.1.
Other ECL includes loss allowance provided against off-book portfolio in India and loan including interest
exemptions for settlement of customer loans in case of death or disability.
The Group was able to collect a significant amount of previously written off loans, mainly in India.
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9. Other operating expenses
Other operating expenses includes the following items:
Notes
2023
USD’000
2022
USD’000
Administrative expenses 9.1. (29,148) (27,975)
Professional fees 9.2. (3,408) (2,579)
Audit fees 9.3. (1,763) (1,527)
International travel (606) (646)
CSR expenses (239) (249)
Other (312) (327)
(35,476) (33,303)
9.1. Administrative expenses
2023
USD’000
2022
USD’000
Office expenses (5,152) (5,158)
Transport and representation expenses (10,303) (10,391)
Gas, water and electricity (1,154) (1,106)
Telecommunications and internet expenses (3,881) (3,119)
VAT/Output tax/Service tax (4,424) (3,445)
Bank charges (1,102) (1,472)
Insurance expenses (840) (642)
Training and seminar expenses (400) (142)
Other administrative expenses (1,892) (2,500)
(29,148) (27,975)
VAT/Output tax/Service tax expenses increased mainly due to the inclusion of VAT on Transfer Pricing (‘TP’)
in Kenya.
Other administrative expenses includes several small items that are smaller than USD 150K on an individual
basis.
9.2. Professional fees
2023
USD’000
2022
USD’000
Legal services fees (336) (295)
Other professional fees (3,072) (2,284)
(3,408) (2,579)
Other professional fees includes fees for various consultants on tax, IT, accounting and actuary valuation
services.
8. Personnel expenses continued
8.3. Sensitivity analysis
A quantitative sensitivity analysis for significant assumptions as at 31 December 2023 and 31 December 2022
is shown below.
Assumptions
Discount rate Future salary increases
Sensitivity level Year
1%
increase
USD’000
1%
decrease
USD’000
1%
increase
USD’000
1%
decrease
USD’000
Impact on defined benefit
obligation 2023 (96) 1,129 1,140 (115)
2022 (180) 1,290 1,298 (197)
8.4 Share based payments
Personal expenses for 2023 includes an amount of USD 71K against share based payment expenses.
In October 2022 and July 2023, the Group granted options (‘Options’) for 2.6 million ordinary shares of
GBP 0.01 each in the Group Company under its LTIP to certain Executive Directors and other senior staff.
The Company’s LTIP is designed to incentivise and retain Directors and senior staff, along with aligning them
with shareholders’ interest to create long term value.
The Options will normally vest, subject to continued employment, on the following schedule:
a) 20% each year between the first and fifth anniversaries of the Grant Date; or
b) for Executive Directors only, 60% on the third anniversary and 20% on each of the fourth and fifth
anniversaries of the Grant Date.
To the extent they vest, the Options are exercisable at a price of GBP 0.93 and GBP 0.84 per ordinary share
for options granted in 2022 and 2023 respectively, being the average share price for the three business days
before the Grant Date. The Group has issued certificates to the participants to the plan. During 2023 a total
number of 0.5 million Options lapsed because of staff who left the Group.
The fair value of options granted during the year 2023 was estimated on the date of grant based on the
Black-Scholes model using the following assumptions:
Expected volatility (%) 66%
Risk-free interest rate (%) 3.70%
Expected life of share options (years) Ten years
Current Share Price (£) 0.92
Dividend yield (%) 0%
The weighted average fair value of the options granted during the 12 months ended 31 December 2023
was GBP 0.69.
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11.1. Current tax liability
2023
USD’000
2022
USD’000
Balance as at beginning of period 8,873 6,265
Tax charge:
 Current period 20,062 20,883
 Previous period 1,943 7
Tax paid (18,290) (16,643)
Foreign exchange adjustment (3,262) (1,639)
Balance as at end of period 9,326 8,873
11.2. Deferred tax assets
2023
USD’000
2022
USD’000
Balance as at beginning of period 4,625 13,362
Impact of IAS 29 (hyperinflation) (101) –
Adjusted balance at 1 January 2023 4,524 13,362
Addition/(adjustment) during the period 2,544 (7,436)
Impact of hyperinflation for the period 28 –
Foreign exchange adjustment (1,327) (1,301)
Balance as at end of period 5,769 4,625
Deferred tax assets are temporary differences recognised in accordance with local tax regulations and with
reasonable certainty that sufficient future taxable income will be available against which such deferred tax
assets can be realised.
11.3. Deferred tax liability
2023
USD’000
2022
USD’000
Balance as at beginning of period 2,184 2,296
Impact of IAS 29 (hyperinflation) 1 –
Adjusted balance at 1 January 2023 2,185 2,296
(Adjustment)/charge during the period 121 (112)
Impact of hyperinflation for the period 130 –
Foreign exchange adjustment (30) –
Balance as at end of period 2,406 2,184
9. Other operating expenses continued
9.3 Fees to the Group’s auditor is analysed as below:
2023
USD’000
2022
USD’000
Fees to the Group’s auditor for the audit of the Group’s annual accounts (1,204) (1,008)
Fees to the Group’s auditor for other services:
Audit of the accounts of subsidiaries (238) (219)
Audit-related assurance services (313) (295)
Total audit and audit-related assurance services (1,755) (1,522)
Other assurance services (8) (5)
(1,763) (1,527)
10. Exchange rate differences
The Group incurred certain foreign exchange losses on monetary assets denominated in currencies other than
the Group’s functional currency.
2023
USD’000
2022
USD’000
Foreign currency losses (4,923) (4,876)
Foreign currency gains 2,955 3,317
(1,968) (1,559)
11. Income tax and withholding tax expense
2023
USD’000
2022
USD’000
Income tax expense
Current income tax (20,062) (20,883)
Income tax for previous period (1,943) (7)
Changes in deferred income tax 1,856 (6,284)
(20,149) (27,174)
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11.6. Income tax per region
2023
USD’000
2022
USD’000
Corporate income tax – West Africa (7,402) (9,417)
Corporate income tax – South Asia (6,721) (9,292)
Corporate income tax – East Africa (4,422) (3,994)
Corporate income tax – South East Asia (1,422) (1,653)
Corporate income tax – Holding and other non operating entities (182) (2,818)
Total income tax per region (20,149) (27,174)
11.7. Withholding tax expense
2023
USD’000
2022
USD’000
Withholding tax on interest income, dividend, royalties and service fees (3,342) (1,332)
Deferred tax on undistributed dividend 53 112
Total withholding tax expense (3,289) (1,220)
Interest income, dividends, royalties and service fees are subject to withholding tax in certain jurisdictions.
The applicable withholding tax rates vary per country and per type of income.
11. Income tax and withholding tax expense continued
11.4. Deferred tax relates to:
Deferred tax relates to:
2023 2022
Deferred tax
assets
USD’000
Deferred tax
liabilities
USD’000
Income
statement
USD’000
Deferred tax
assets
USD’000
Deferred tax
liabilities
USD’000
Income
statement
USD’000
Allowance for ECL 1,511 – 813 1,321 – (4,759)
Provision for retirement
liabilities 1,443 – 760 1,138 – (322)
Provision on FX loss 267 – 235 51 – (21)
Unused tax losses – – – – – (3,139)
Other temporary differences 2,954 (169) 457 3,177 (183) 2,407
IFRS 16 Lease – 284 (185) – 183 8
Undistributed profit of
subsidiary – 2,130 53 – 2,184 113
Modification loss – – (224) 236 – (459)
Impact of hyperinflation (72) 131 (203) – – –
Other comprehensive income/
Revaluation of cash flow hedge (334) 30 513 (1,298) – (1,152)
5,769 2,406 2,219 4,625 2,184 (7,324)
11.5. Reconciliation of the total tax charge
2023
USD’000
2022
USD’000
Accounting result before tax 32,195 46,281
Income tax expense at nominal rate of consolidated entities (12,039) (15,373)
Over/(under) provision for income tax previous year (2,970) (7)
Movement in unrecognised deferred taxes (2,866) (11,285)
Exempt income 59 74
Tax impact on elimination 527 531
Impact for hyperinflation (1,356) –
Permanent differences (non-deductible expenses) (1,504) (1,114)
Total income tax expense for the period (20,149) (27,174)
Weighted average nominal rate of consolidated entities 37% 33%
Consolidated effective tax rate 63% 59%
12. Cash at bank and in hand
2023
USD’000
2022
USD’000
Cash at bank 76,215 83,006
Cash in hand 214 111
76,429 83,117
An amount of USD 27.9 million (2022: USD 32.6 million) of cash at bank is restricted and cannot be readily
available. Out of this USD 18.4 million (2022: USD 17.1 million) in the Philippines is restricted as per the
Securities and Exchange Commission (‘SEC’) regulations as it relates to LCBU, the collection of security
collateral from clients of a lending company. LCBU is placed into a segregated account. In Tanzania USD 9.5
million (2022: 7.5 million) is restricted and maintained in a separate account as per the Bank of Tanzania’s
requirement for non-deposit-taking microfinance institutions (‘MFIs’) as it relates to security deposits from the
clients. In Kenya, the new ‘Central bank of Kenya (AMENDMENT) ACT’ restricted non-deposit microfinance
companies from taking cash collateral from clients. ASA Kenya has fully repaid the collateral amount to the
clients in 2023.
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13. Loans and advances to customers
Notes
2023
USD’000
2022
USD’000
Loans and advances to customers at amortised cost 13.1. 297,851 331,898
Loans and advances to customers at FVTPL 13.6. 32,306 –
330,157 331,898
13.1 Loans and advances to customers at amortised cost
Loans and advances to customers are net of allowance for expected credit loss.
Notes
2023
USD’000
2022
USD’000
Gross loan portfolio 13.2. 305,248 344,985
Interest receivable on loans to customers 4,464 7,265
Unamortised processing fee (4,949) (4,303)
Net impact of modification loss – (149)
Gross loans 304,763 347,798
Allowance for expected credit loss 13.3. (6,912) (15,900)
Net loan portfolio 297,851 331,898
13.2. Gross loan portfolio
As of 31 December 2023, the gross loan portfolio amounts to USD 305.2 million (31 December 2022: 345.0
million). Interest receivable on loans to customers is realisable in line with the loan repayment schedules.
ASA India operates a Business Correspondent and partnership model with IDFC, JSFB and FSFB. ASA India
operates as an agent, whereby ASA India selects borrowers based on the selection criteria of the BC Partner.
After approval of the selected borrowers, the BC Partners disburse the loans through ASA India and ASA India
collects the interest and repayments from the borrowers on behalf of the BC Partners. In exchange for these
services, ASA India receives service fees and processing fees.
The loans to borrowers of IDFC, JSFB and FSFB and related funding are not recognised on the balance sheet
since the loan agreements are made between the partners and the borrowers. In the case of IDFC, ASA India
has a limited liability for the non-performing loans under this agreement. The service fees received are
reported under ‘Other operating income’ in note 6.
Under the agreements with the BC Partners, ASA India is liable for payment of non-performing loans, which
is regarded as a financial guarantee. This liability for BC partners is reported under ‘Provisions’ in note 28.
This liability is based on the Group’s ECL policy as explained in note 2.5.1 taking into account any limits in the
liability towards the BC Partners, because it is the best estimate for the expected outflow of cash at reporting
date. The related expense is reported under credit loss expenses in note 7.
ASA India provided security deposits to the BC partners as collateral for the financial guarantees provided.
These security deposits are reported under ‘Due from banks’ in note 14. Other receivables and payables
related to the BC model are reported under ‘Other assets’ and ‘Other liabilities’. More information is available
in note 2.5 .
ASA India entered into DA agreement with SBI. Under the agreement the entity transferred a pool of its loans
to customers amounting to USD 16.5 million to the SBI against a purchase consideration of USD 14 million
which is 85% of the loan portfolio. 15% is retained by ASA India as the Minimum Retention Rate (‘MRR’) as
per the guidance of RBI. ASA India will continue to collect the instalments from all the borrowers and transfer
the amount to the SBI where the SBI will retain collections from 85% of the clients and adjust that with the
purchase consideration (borrowings) and repay collections from 15% of the customers to ASA India. The 85%
of the pool is hence not recognised in the books of ASA India as the Company transferred all significant risks
and rewards of such loans to the SBI.
The outstanding loans to borrowers under the BC model and DA model which are not recognised on the
balance sheet at 31 December 2023 amounted to USD 38.8 million and USD 980K respectively (2022: USD
21.4 million and USD 1.2 million).
13.3. Allowance for ECL
Notes
2023
USD’000
2022
USD’000
Balance as at beginning of the period (15,900) (25,794)
Reclassification to FVTPL 252 –
ECL charge on loans and advances 7. (5,804) (4,847)
ECL charge on interest receivable (174) 368
Write-off of loans and interest 12,894 10,828
Exchange rate differences 1,820 3,545
Balance at end of the period (6,912) (15,900)
The key assumptions applied for the expected credit loss provision are explained in note 2.5.1.
13.4. The breakdown of the allowance for expected credit loss is as follows:
2023
USD’000
2022
USD’000
ECL on loans and advances (6,687) (15,197)
ECL on interest receivable (225) (703)
(6,912) (15,900 )
ECL provision has been reduced mainly due to the write-off of loans and interest of USD 12.9 million.
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13. Loans and advances to customers continued
13.5. The following tables explain the movement of gross OLP and Interest receivable and related provisions in stages
Stage 1
USD’000
Stage 2
USD’000
Stage 3
USD’000
Total
USD’000
Gross OLP
Interest
receivable Total ECL Gross OLP
Interest
receivable Total ECL Gross OLP
Interest
receivable Total ECL Gross OLP
Interest
receivable Total ECL
At 1 January 2023 324,354 5,739 330,093 (1,235) 3,825 763 4,588 (859) 16,806 762 17,568 (13,806) 344,985 7,264 352,249 (15,900)
Reclassification to FVTPL (44,131) (934) (45,065) 248 (241) (17) (258) 1 (526) 59 (467) 3 (44,898) (892) (45,790) 252
New assets originated 637,305 – 637,305 – – – – – – – – – 637,305 – 637,305 –
Interest revenue – 111,859 111,859 – – 11,308 11,308 – – 12,563 12,563 – – 135,730 135,730 –
Collections (552,631) (111,913) (664,544) – (2,217) (11,988) (14,205) – (14,355) (13,175) (27,530) – (569,203) (137,076) (706,279) –
ECL (charges)/releases – – – (235) – – – 909 – – – (6,652) – – – (5,978)
Transfers:
Stage 1 to Stage 2 (1,779) (157) (1,936) 7 1,779 157 1,936 (7) – – – – – – – –
Stage 1 to Stage 3 (19,685) (593) (20,278) 76 – – – – 19,685 593 20,278 (76) – – – –
Stage 2 to Stage 1 775 60 835 (156) (775) (60) (835) 156 – – – – – – – –
Stage 2 to Stage 3 – – – – (419) (42) (461) 86 419 42 461 (86) – – – –
Stage 3 to Stage 1 761 66 827 (650) – – – – (761) (66) (827) 650 – – – –
Stage 3 to Stage 2 – – – – 348 35 383 (301) (348) (35) (383) 301 – – – –
Write-off – – – – – – – – (12,331) (562) (12,893) 12,894 (12,331) (562) (12,893) 12,894
Fx impact (48,094) – (48,094) 405 (389) – (389) 3 (2,127) – (2,127) 1,412 (50,610) – (50,610) 1,820
At 31 December 2023 296,875 4,127 301,002 (1,540) 1,911 156 2,067 (12) 6,462 181 6,643 (5,360) 305,248 4,464 309,712 (6,912)
Stage 1
USD’000
Stage 2
USD’000
Stage 3
USD’000
Total
USD’000
Gross OLP
Interest
receivable Total ECL Gross OLP
Interest
receivable Total ECL Gross OLP
Interest
receivable Total ECL Gross OLP
Interest
receivable Total ECL
At 1 January 2022 361,956 7,540 369,496 (7,039) 17,181 3,090 20,271 (7,124) 14,161 70 14,231 (11,631) 393,298 10,700 403,998 (25,794)
New assets originated 951,003 – 951,003 – – – – – – – – – 951,003 – 951,003 –
Interest revenue – 119,101 119,101 – – 34,585 34,585 – – 7,490 7,490 – – 161,176 161,176 –
Collections (902,323) (118,290) (1,020,613) – (9,131) (35,596) (44,727) – (14,054) (10,433) (24,487) – (925,508) (164,319) (1,089,827) –
ECL (charges)/releases – – – 5,202 – – – 2,550 – – – (12,231) – – – (4,479)
Transfers:
Stage 1 to Stage 2 (3,975) (1,082) (5,057) 97 3,975 1,082 5,057 (97) – – – – – – – –
Stage 1 to Stage 3 (23,221) (1,764) (24,985) 472 – – – – 23,221 1,764 24,985 (472) – – – –
Stage 2 to Stage 1 402 232 634 (244) (402) (232) (634) 244 – – – – – – – –
Stage 2 to Stage 3 – – – – (7,098) (2,166) (9,264) 3,373 7,098 2,166 9,264 (3,373) – – – –
Stage 3 to Stage 1 1 2 3 (3) – – – – (1) (2) (3) 3 – – – –
Stage 3 to Stage 2 – – – – 1 – 1 (1) (1) – (1) 1 – – – –
Write-off – – – – – – – – (10,535) (293) (10,828) 10,828 (10,535) (293) (10,828) 10,828
Fx impact (59,489) – (59,489) 280 (701) – (701) 196 (3,083) – (3,083) 3,069 (63,273) – (63,273) 3,545
At 31 December 2022 324,354 5,739 330,093 (1,235) 3,825 763 4,588 (859) 16,806 762 17,568 (13,806) 344,985 7,264 352,249 (15,900)
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14. Due from banks
Notes
2023
USD’000
2022
USD’000
Due from banks 20,705 18,208
Escrow bank account at Citibank 14.1. 21,392 20,692
42,097 38,900
14.1. Escrow bank account at Citibank
In certain countries in which the Group operates, Non–Resident Capital Gains Tax (‘NRCGT’) regimes have
been enacted in recent years which may give rise to an NRCGT liability if there is a change of control (‘COC’)
of more than 50% of the underlying ownership of a subsidiary of the Company resident in that country as
measured over a rolling three-year period. In each case, the liability is payable by the local subsidiary. A COC
of certain of the Group’s subsidiaries resulting from the offering to certain institutional and professional
investors in view of the admission of the Group to the London Stock Exchange in 2018 (the ‘Global Offer’),
or thereafter, may trigger NRCGT liabilities in certain jurisdictions for the affected subsidiaries. In connection
with the potential NRCGT liability, CMI, being the selling shareholder at the time of the listing of the Group on
13 July 2018, agreed upon admission to place USD 20 million (the ‘Escrow Amount’) of its net proceeds from
the sale of shares in the Global Offer in an escrow account for the sole benefit of the Company (the ‘Escrow
Account’). The Escrow Amount may be applied to fund NRCTG liabilities in accordance with the escrow deed
dated 29 June 2018 between, inter alia, CMI and the Company. The Escrow Account is established in the
name of the Company and is therefore presented as part of ‘Due from banks’. The beneficial ownership
of these funds, including any interest accrued thereon and less any expenses, rests with CMI because the
Company will need to return all remaining funds to CMI in accordance with the terms of the escrow deed.
Therefore, the same amount is presented as a liability to CMI under ‘Other liabilities’.
13. Loans and advances to customers continued
13.6. Loans and advances to customers at FVTPL
2023
USD’000
2022
USD’000
Loans and advances to customers at FVTPL 32,306 –
32,306 –
Loans and advances for customers with insurance products in the Philippines (1st cycle loans), Uganda, Kenya
and Sri Lanka were reclassified from amortised cost to FVTPL on 1 January 2023. See note 2.3.1 for details.
15. Equity investments at FVOCI
2023
USD’000
2022
USD’000
MFX Solutions, LLC
Balance at the beginning of the period 244 237
Gain on revaluation through OCI 29 7
Balance at the end of the period 273 244
The Group purchased 153,315 shares of MFX Solutions, LLC USA on 7 April 2017. This represents 1% of the
total number of issued shares of 15,331,330. The purchase price per share was USD 1.3045. These unlisted
equity investments were irrevocably designated at initial recognition as held at FVOCI. Their fair value has
been classified as Level 2.
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16. Property and equipment
Property and equipment consists of land and buildings, office furniture and equipment. Depreciation policies are described in detail in the accounting policies. The movements are as follows.
2023 2022
Furniture and
fixtures
USD’000
Vehicles
USD’000
Office
equipment
including IT
USD’000
Buildings
USD’000
Total
USD’000
Furniture and
fixtures
USD’000
Vehicles
USD’000
Office
equipment
including IT
USD’000
Buildings
USD’000
Total
USD’000
Cost at the beginning of the period 1,565 405 9,006 1,127 12,103 1,683 320 9,483 1,229 12,715
Accumulated depreciation at the beginning of the period (1,120) (218) (7,085) (167) (8,590) (1,166) (252) (7,055) (157) (8,630)
Carrying value at the beginning of the period 445 187 1,921 960 3,513 517 68 2,428 1,072 4,085
Impact of IAS 29 (hyperinflation) 11 30 53 – 94 – – – –
–
Adjusted balance at 1 January 2023 456 217 1,974 960 3,607 517 68 2,428 1,072 4,085
Additions during the period at cost 23 5 2,237 2,107 4,372 219 210 1,146 – 1,575
Foreign currency adjustment (193) (64) (1,029) 32 (1,254) (277) (100) (1,375) (102) (1,854)
Disposal during the period – – (34) – (34) (60) (25) (248) – (333)
Depreciation during the period (186) (53) (1,472) (22) (1,733) (242) (66) (1,485) (23) (1,816)
Adjustment of depreciation for disposals 210 28 605 31 874 77 40 371 – 488
Impact of hyperinflation for the period 14 (19) 89 294 378 – – – – –
Foreign currency differences 161 29 838 (1) 1,027 211 60 1,084 13 1,368
Carrying value at the end of the period 485 143 3,208 3,401 7,237 445 187 1,921 960 3,513
Cost at the end of the period 1,395 346 10,180 3,266 15,187 1,565 405 9,006 1,127 12,103
Accumulated depreciation at the end of the period (935) (214) (7,114) (159) (8,422) (1,120) (218) (7,085) (167) (8,590)
Impact of IAS 29 (hyperinflation) 25 11 142 294 472 – – – – –
Carrying value at the end of the period 485 143 3,208 3,401 7,237 445 187 1,921 960 3,513
Addition of buildings includes purchase of building of USD 1.7 million in Ghana and USD 0.4 million in Uganda.
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17. ROU assets and lease liabilities
2023
USD’000
2022
USD’000
ROU assets at the beginning of the period 4,589 5,031
Impact of IAS 29 (hyperinflation) 281 –
Adjusted balance at 1 January 2023 4,870 5,031
Additions during the period 3,335 3,815
Depreciation during the period (3,722) (3,931)
Impact of hyperinflation for the period (15) –
Exchange rate differences 317 (326)
ROU assets at the end of the period 4,785 4,589
2023
USD’000
2022
USD’000
Lease liabilities at the beginning of the period 3,091 3,459
Interest expense of lease liabilities 341 299
Additions on lease liabilities during the period 3,335 3,815
Payment of lease liabilities (3,690) (4,353)
Exchange rate differences 195 (129)
Lease liabilities at the end of the period 3,272 3,091
The Group recognises leased office premises under ROU assets.
Between January and December 2023, the Group entered into 1,163 new contracts and renewal contracts.
This excludes the new/renewal contracts of Ghana, Nigeria and Tanzania as they have fully prepaid contracts
and are not impacted by IBRs.
18. Other assets
Other assets comprises of the following:
Notes
2023
USD’000
2022
USD’000
Receivables from related parties 18.1. 810 249
Prepayments 2,862 2,874
Employee advances 2,783 2,296
Advance income tax 2,902 2,147
Security deposit 272 249
Receivables under off-book BC model (ASA India) 18.2. 1,014 569
Insurance claim receivable 37 109
Interest receivable on due from banks 379 337
Advance to lenders 18.3. 955 –
Other receivables 18.4. 1,476 1,140
13,490 9,970
Prepayments and employee advances are in line with security against housing contracts, funding agreements
and employee receivables. Advance income tax will be set off against current tax payable after completion of
the tax assessment.
18.1. Receivables from related parties
2023
USD’000
2022
USD’000
Sequoia BV 41 145
MBA Philippines 61 86
Catalyst Investment Management services 22 18
ASAIG plc EBT
686
–
810 249
The receivables from related parties are short term in nature and do not accrue interest.
18.2. Receivables under off-book BC model (ASA India)
Receivables under off-book BC model is presented net of impairment. Gross amount receivable under off
book BC model is USD 3.4 million. (2022: 2.2 million).
18.3. Advance to lenders
ASAI NV paid an advance amounting to USD 1.0 million to Symbiotic and Frankfurt School Financial Services
in May 2023 on behalf of ASA Myanmar as per the loan restructuring agreed in March 2023. This is an
advance for a future assignment of various loans to ASAI NV. USD 45K was adjusted in December 2023
for the purchase value of one of the related Symbiotics loans actually being assigned to ASAI NV.
18.4. Other receivables
Includes various advances in relation to employee’s insurance, receivable from VAT and service tax
authorities etc. Individually none of the advances are over USD 150K.
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19. Derivatives
2023
USD’000
2022
USD’000
Forward contracts 884 7,131
Swap agreements
1,566
724
Derivative assets total 2,450 7,855
Forward contracts (78) (456)
Swap agreements
–
–
Derivative liabilities total (78) (456)
Total derivatives at fair value 2,372 7,399
19.1. The Group is holding the following foreign exchange forward contracts:
As of 31 December 2023
Maturity
<30 days
USD’000
1-3 months
USD’000
3-12 months
USD’000
>12 months
USD’000
Total
USD’000
ASAI NV
Notional amount (in USD) – – – 993 993
Average forward rate (USD/KYAT) – – – 92 92
Carrying amount (in USD) – – – (9) (9)
Kenya
Notional amount (in USD) – – 4,000 – 4,000
Average forward rate (USD/TZS) – – 145 – 145
Carrying amount (in USD) – – 743 – 743
Pakistan
Notional amount (in USD) – 552 17,094 – 17,646
Average forward rate (USD/PKR) – 312 302 – 300
Carrying amount (in USD) – (29) (40) – (69)
Sierra Leone
Notional amount (in USD) – – 1,000 – 1,000
Average forward rate (USD/SLL) – – 23 – 23
Carrying amount (in USD) – – 105 – 105
Zambia
Notional amount (in USD) – 250 250 – 500
Average forward rate (USD/ZMW) – 23 28 – 26
Carrying amount (in USD) – 33 4 – 37
As of 31 December 2022
Maturity
<30 days
USD’000
1-3 months
USD’000
3-12 months
USD’000
>12 months
USD’000
Total
USD’000
Pakistan
Notional amount (in USD) 2,900 7,952 29,391 – 40,243
Average forward rate (USD/PKR) 204 206 222 – 217
Carrying amount (in USD) 439 1,428 5,133 – 7,000
Myanmar
Notional amount (in USD) – 1,000 – – 1,000
Average forward rate (USD/KYAT) – 1,914 – – 1,914
Carrying amount (in USD) – 131 – – 131
Zambia
Notional amount (in USD) – 250 500 – 750
Average forward rate (USD/ZMW) – 33 31 – 32
Carrying amount (in USD) – (190) (266) – (456)
Please see note 36 and 37 for more information.
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Financial Statements
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20. Intangible assets and goodwill
Goodwill
USD’000
Intangible
assets
USD’000
Total
USD’000
Cost
At 1 January 2022 30 452 482
Additions – 4,592 4,592
Impaired (17) – (17)
Fx movement (13) (3) (16)
At 31 December 2022 – 5,041 5,041
Impact of IAS 29 (hyperinflation) – 4 4
Adjusted balance at 1 January 2023 – 5,045 5,045
Additions – 2,284 2,284
Amortisation (10) (10)
Impact of hyperinflation for the period 55 55
Fx movement – (34) (34)
At 31 December 2023 – 7,340 7,340
Goodwill arose from the acquisition of Lak Jaya by CMI Lanka in 2008.
For the year ended 31 December 2022, an impairment assessment on the remaining goodwill was conducted
and based on such the goodwill was fully impaired.
Intangible assets includes the development costs for the project to develop a digital financial services (DFS)
platform. The first implementation is expected to take place in Ghana in 2024 and, if successful and upon
approval from the regulator, this will be followed by the launch of a range of digital financial and other services
to support the growth of small businesses. The platform will add a digital channel to the existing branch
model. The DFS will be offered to its clients through a smartphone app, where clients will be able to apply
online for loans and other financial services like a current account and a savings or deposit account. As part of
the DFS, the Group is also developing an Supplier Market Place app (‘SMP’) where clients can purchase goods
for their small businesses. SMP will be a separate app but is part of the DFS model to retain and attract loan
and savings clients and generate payment transactions that generate commissions.
For the introduction of current accounts and savings and deposits accounts and other digital services to our
clients, the Group decided to add a CBS to its IT infrastructure. The Group has procured a 10 year license
to the Temenos Financial Inclusion suite, which is an off-the-shelf CBS system. In February 2024, clients
in Pakistan were migrated from our incumbent loan system to the Temenos Core Banking System. Ghana
will be the next country to implement the CBS alongside the DFS.
19. Derivatives continued
19.2. The Group also holds the below swap contracts:
2023
USD’000
2022
USD’000
Cross-currency interest rate swap Notional value 10,104 1,750
Carrying value 1,566 724
At 31 December 2023, the Group had eight cross-currency interest rate swap agreements in place.
Three swap agreements in ASA Sierra Leone with a total notional amount of USD 1.8 million. ASA Sierra
Leone entered in to a swap of USD 1 million on 7 July 2021 where ASA Sierra Leone pays a fixed rate of
interest of 19.09% in SLE and receives interest at a fixed rate of 8% in USD notional amount. On 2 February
2022, the entity entered into another swap agreement of USD 500K where ASA Sierra Leone pays a fixed rate
of interest of 19.22% in SLE and receives at 8% in USD notional amount. ASA Sierra Leone also has another
swap contract of USD 300K entered on 10 October 2023, where the entity pays at fixed interest rate of
29.78% in SLE and receives at 12% in USD.
Two swap agreements in ASA Zambia with a total notional amount of USD 500K were entered into. ASA
Zambia entered in to a swap of USD 250K on 3 February 2022 where the entity pays a fixed rate of interest
of 24.80% in ZMW and receives interest at a fixed rate of 8% in USD notional amount. On 22 August 2023,
the entity entered in to another swap agreement of USD 250K where ASA Zambia pays a fixed rate of interest
of 22.83% in ZMW and receives at a floating interest rate of Secured Overnight Financing Rate (‘SOFR’) +
6.5% in USD notional amount.
ASA Kenya also has three swap agreements in place. A swap agreement with notional amount of USD 2
million entered on 10 May 2023 where ASA Kenya pays at a fixed interest rate of 17.90% in KES and receives
at 6.25% in USD notional amount. Another swap agreement of USD 3 million was entered into where ASA
Kenya pays at 20.95% in KES and receives at 7.5% in USD. The remaining one of EUR 1.5 million entered
on 26 June 2023 where ASA Kenya pays at a fixed interest rate of 17.85% in KES and receives at 5% in
EUR notional amount.
The swaps are being used to hedge the exposure to changes in the cash flow of its interest on USD and
EUR loans.
The applied valuation techniques include forward pricing and swap models, using present value calculations
by estimating future cash flows using future exchange rates and discounting them with the appropriate
interest rate curves. These derivative contracts are classified as Level 2 financial instruments.
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22. Retained earnings
Total retained earnings are calculated as follows:
2023
USD’000
2022
USD’000
Balance at the beginning of the period 173,297 155,405
Impact of loan reclassification at Fair Value Through Profit and Loss
(‘FVTPL’) 2,392 –
Adjusted balance at the beginning of the period 175,689 155,405
Transferred to NCI and others 969 –
Result for the period 9,206 17,892
Balance at the end of the period 185,864 173,297
Profit for the period
Attributable to equity holders of the parent 9,206 17,892
Non-controlling interest (449) (5)
8,757 17,887
Part of retained earnings relates to Non-Governmental Organisations (‘NGOs’) which are consolidated in
these financial statements. The retained earnings of these NGOs cannot be distributed to their respective
members. Retained earnings relating to NGOs amounted to USD
2.1 million at 31 December 2023 (2022: USD 2.0 million).
ASA S&L, ASA India, ASA Nigeria have statutory requirements to add a percentage of the net profits to a legal
reserve. Therefore, part of retained earnings cannot be distributed to shareholders. Retained earnings relating
to these legal reserves amounted to USD 22.4 million in December 2023 (2022: USD 23.4 million).
No dividend was declared in 2023.
23. Other reserves
Total other reserves are calculated as follows:
Notes
2023
USD’000
2022
USD’000
Balance at the beginning of the period 3,324 995
Actuarial gains and losses on defined benefit liabilities 8.1. 448 470
Share-based payments 71 –
Movement in hedge accounting reserve (1,669) 3,004
Gain on revaluation of MFX investment 15. 29 7
Others net of tax 555 (1,152)
Balance at the end of the period 2,758 3,324
20. Intangible assets and goodwill continued
Total spent during the year against DFS and CBS are as follows:
Particulars
2023 2022
Capitalised
USD’000
Charged
to P&L
USD’000
Total
USD’000
Capitalised
USD’000
Charged
to P&L
USD’000
Total
USD’000
Development fees 613 – 613 1,032 – 1,032
Licence fees 345 482 827 1,906 588 2,494
Implementation cost 921 – 921 948 – 948
Consultancy 40 – 40 180 – 180
Salary and travelling 365 73 438 526 218 744
2,284 555 2,839 4,592 806 5,398
21. Issued capital
2023
USD’000
2022
USD’000
ASA International Group plc 100 million shares of GBP 0.01 each 1,310 1,310
1,310 1,310
No movements in issued capital during 2023 and 2022.
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24. Foreign currency translation reserve
The translation of the Company’s subsidiaries and overseas branches from local currency into the Group’s
presentation currency (USD) results in the following currency translation differences:
2023
USD’000
2022
USD’000
Balance at the beginning of the period (88,123) (54,132)
Impact of IAS 29 (hyperinflation) 256 –
Adjusted balance at the beginning of the period (87,867) (54,132)
Translation of assets and liabilities of subsidiaries to USD (24,131) (33,991)
Balance at the end of the period (111,998) (88,123)
The entity-wise breakdown of translation adjustment is as follows:
2023
USD’000
2022
USD’000
Ghana 1,727 (17,395)
Pakistan (7,729) (9,400)
Nigeria (15,058) (2,540)
Sri Lanka 181 (1,450)
Philippines 64 (978)
Myanmar (1) (766)
Sierra Leone 326 (685)
Kenya (1,487) (525)
Rwanda (261) (132)
Zambia (651) (120)
Tanzania (962) (111)
Others (280) 111
(24,131) (33,991)
25. Debt issued and other borrowed funds
Notes
2023
USD’000
2022
USD’000
Debt issued and other borrowed funds by operating
subsidiaries 25.1. 204,653 201,590
Symbiotics-managed funds (ASAIH/ASAI NV) 25.2. 21,019 14,000
Oikocredit (ASAIH) 25.3. – 7,500
BIO (ASAIH) 25.4. 10,000 10,000
OeEB (ASAIH) 25.5. 5,625 9,375
Citi (ASAI NV) 25.6. – 5,000
Ninety one (ASAI NV) 25.7. 10,000 10,000
responsAbility-managed funds (ASAI NV) 25.8. 7,167 –
DFC (ASAI NV) 25.9. 10,000 –
Interest payable on third-party loans 4,947 3,836
273,411 261,301
25.1. Breakdown of borrowings by operating subsidiaries are shown below:
2023
USD’000
2022
USD’000
ASA India 21,127 32,841
PPFC 54,246 44,512
ASA Pakistan 28,696 50,705
ASA Tanzania 52,541 39,596
ASA Kenya 25,424 13,246
ASA Myanmar 12,892 11,438
ASA Uganda 5,592 4,742
Lak Jaya 1,503 1,332
Others 2,632 3,178
204,653 201,590
Most of the loan agreements are subject to covenant clauses, whereby the subsidiary is required to meet
certain key financial ratios. Some subsidiaries did not fulfil some of the ratios as required in agreements.
As of 31 December 2023, out of the total outstanding debt of USD 268.5 million (2022: USD 257.0 million),
the balance for credit lines with breached covenants that did not have waivers amounted to USD 23.0 million
(2022: USD 65.0 million). Waivers have been received subsequently for all breached covenants (2022: USD
64.0 million), but for a period of less than twelve months going forward. Due to these breaches of covenant
clauses, the lenders are contractually entitled to request for immediate repayment of the outstanding loan
amounts. The outstanding balance is presented as on demand as at 31 December 2023. The lenders have not
requested any early repayment of loans as of the date when these financial statements were approved by the
Board of Directors.
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26. Due to customers
Clients of the Company’s subsidiaries contribute to a ‘security deposit fund’. These deposits can be withdrawn
partly by clients but not in the full amount unless the client has fully repaid the outstanding loan balance.
2023
USD’000
2022
USD’000
Clients’ security deposits 66,675 68,894
Clients’ voluntary savings 12,398 15,217
Interest payable on deposits and savings 22 44
79,095 84,155
Clients can deposit voluntary savings where the subsidiary has a licence to do so. The rate of interest on client
security deposits and client voluntary savings amount to 8% in ASA Ghana and 7% in ASA Nigeria. In ASA
Myanmar the interest rate on voluntary savings is 10% and for compulsory savings 14%. ASA Rwanda
provides 6% interest on voluntary savings.
25. Debt issued and other borrowed funds continued
25.2. Symbiotics-managed funds (ASAIH/ASAI NV)
In October 2019, ASAI NV entered into a loan agreement with one investment fund managed by Symbiotics
SA. In November 2021, ASAI NV received USD 10.0 million at six months Libor plus 4.75% per annum.
In April 2022 ASAI NV received an additional USD 4.0 million at six months SOFR plus 4.75% per annum
with an adjustment spread of 0.4283%. All the loans will be repaid within three years of disbursement.
ASAIH is a guarantor for these loans.
In June 2023, ASAI NV entered into a loan agreement with one investment fund managed by Symbiotics SA.
In June 2023, ASAI NV received EUR 5 million at 8.75% per annum. In December 2023 ASAI NV received
an additional USD 1.50 million at 9% per annum. The loans will be repaid within two years of disbursement.
ASAIH is a guarantor for these loans.
25.3. Oikocredit (ASAIH)
On 12 July 2018, ASAIH entered into a loan agreement with Oikocredit for a credit line of USD 7.5 million
which has been fully drawn as of December 2019. The term of this credit line is five years. Interest on the
loans is six-month LIBOR or 3.5%, whichever is lower plus a margin of 3% for the direct loan and 2.5% for
the credit line. All the loans are repaid during 2023.
25.4. BIO (ASAIH)
ASAIH entered into a USD 10.0 million subordinated loan agreement with Belgian Investment Company
for Developing Countries SA/NV (‘BIO’) in December 2019. The term of this loan is seven years.
Interest amounts to six months term SOFR + 5.9% per annum.
25.5. OeEB (ASAIH)
ASAIH entered into a USD 15.0 million loan agreement with Oesterreichische Entwicklungsbank Ag (‘OeEB’)
in March 2020 of which USD 10 million is drawn up to June 2020. The loan is repayable in eight equal
instalments and the term of this loan is five years. Interest amounts to six months term SOFR + 3.5% per
annum. ASAI NV is also a co-borrower of the loan.
25.6. Loan from Citi (ASAI NV)
ASAI NV entered into a USD 10.0 million loan agreement with CITIBANK, N.A., JERSEY BRANCH (‘Citi’)
in October 2020. The term of this loan is 30 months. Interest amounts to LIBOR +4.55% per annum.
ASAIH is also a co-borrower of the loan. USD 5 million has been drawn until December 22. The loan
was repaid during 2023 .
25.7. Ninety one (ASAI NV)
ASAI NV entered into a USD 10.0 million loan agreement with NINETY ONE SA PROPRIETARY LIMITED
in October 2022. The loan is repayable in ten equal instalments and the term of this loan is four years.
Interest amounts to three months term SOFR + 5.5% per annum. ASAIH is also a co-borrower of the loan.
25.8. responsAblity managed fund (ASAI NV)
ASAI NV entered into a USD 5 million loan agreement with responsAblity managed fund and received the loan
in March 2023. The loan is repayable in six equal instalments and the term of the loan is three years. Interest
amounts to three months term SOFR + 5.5% per annum. ASAIH is also a co-borrower of the loan.
ASAI NV entered another USD 3 million loan agreement with responsAblity managed fund and received
the loan in December 2023. The loan is repayable in six equal instalments and the term of the loan is 3 years.
Interest amounts to three months term SOFR + 5.5% per annum. ASAIH is also a co-borrower of the loan.
25.9. DFC (ASAI NV)
ASAI NV entered into a USD 15.0 million loan agreement with United States International Development
Finance Corporation (‘DFC’) in September 2023 of which USD 10 million is drawn up to December 2023.
The loan is repayable in four equal instalments and the term of this loan is five years. Interest amounts
to 6% per annum. ASAIH is also a co-borrower of the loan.
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29. Additional cash flow information
29.1. Changes in operating assets
2023
USD’000
2022
USD’000
Loans and advances to customers (66,298) (33,400)
Movement in due from banks (6,845) 18,952
Movement in ROU assets (3,335) (3,815)
Other assets excluding income tax advances (2,898) (1,034)
(79,376) (19,297)
29.2. Changes in operating liabilities
2023
USD’000
2022
USD’000
Due to customers 7,732 15,332
Other liabilities 1,982 (2,895)
Retirement benefit (700) (572)
Movement in lease liability 3,335 3,815
Movement in provisions 390 (637)
12,739 15,043
29.3. Non-cash items
2023
USD’000
2022
USD’000
Depreciation on:
 – Property and equipment 1,743 1,833
 – Right-of-use assets 3,722 3,931
Interest expense on lease liability 341 299
Credit loss expense 5,024 643
Write-off of portfolio 12,894 10,828
Fair value movement of forward contracts 3,358 (1,031)
Fair value movement of loans at FVTPL 2,392 –
Share-based payments 71 –
Charge against defined benefit plan 2,680 1,001
Foreign exchange result 1,968 1,559
Loss on net monetary position 5,789 –
39,982 19,063
27. Other liabilities
Other liabilities are as follows:
Notes
2023
USD’000
2022
USD’000
Security deposits 2,568 2,530
Other deposits 522 426
Liability for DRFs and MRFs – 146
Accrued expenses 866 1,533
Accrued audit fees 1,279 1,224
Taxes payable, other than corporate income tax 5,457 2,598
Amount due to employees 2,016 1,356
Amounts due to related parties 27.1. 21 41
Liability to CMI regarding Escrow Account at Citibank 14.1. 21,392 20,692
Liabilities under off-book BC model (ASA India) 301 255
Liabilities under off-book DA model (ASA India) – 38
Industrial training fund 14 189
Payable to Temenos 554 –
Social welfare fund 377 244
Other sundry liabilities 27.2. 4,196 3,128
39,563 34,400
Security deposits mainly relate to deposits taken from employees as a form of security. Other deposits relate
to various smaller deposits in different countries.
27.1. Amounts due to related parties
2023
USD’000
2022
USD’000
Sequoia BV 6 10
MBA Philippines 15 31
21 41
27.2. Other sundry liabilities
Other sundry liabilities include various smaller accruals and provisions for various entities in the Company.
Individually none of the payables are over USD 150K.
28. Provisions
2023
USD’000
2022
USD’000
Provision for off-book BC model portfolio (ASA India) 1,428 1,038
1,428 1,038
This includes ECL provision against the off-book BC portfolio in India. For details on the Group’s ECL policy
see note 2.5.1.
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30. Risk management
30.1 General
Risk is inherent in the Group’s activities but it is managed through a process of ongoing identification,
measurement and monitoring, subject to certain risk limits and other controls as described in the paragraphs
below. This process of risk management is critical to the Group’s continuing profitability and each individual
within the Group is accountable for the risk exposures relating to his or her responsibilities. The Group is,
amongst others, exposed to business risk, operational risk, IT risk, finance risk, and legal & compliance risk.
The independent risk control process does not include business risks such as changes in demand, technology
and industry. These changes are monitored through the Group’s strategic planning process.
30.2 Risk management structure
The Company’s risk management principles allow it to balance its risk and reward effectively by aligning its
risk appetite with its business strategy. The Company’s risk management framework is based on its three lines
of defence model, which has been adopted at both the Company level and at each of the Company’s MFIs.
The Company’s objectives in using the three lines of defence model include: identifying risk areas and
minimising loss; protecting its clients by minimising financial risk; protecting the interests of its shareholders
and investors; preserving its branches, data, records and physical assets; maintaining its business and
operational structure; enforcing a standard operational procedure for managing risk; and providing guidelines
in line with internationally accepted risk management principles. The first line of defence is the team, person
or department that is responsible for executing particular tasks/activities, as well as for mitigating any related
risks. The second line of defence is comprised of management of the respective departments and personnel
that oversee the first line of defence and provide expertise in risk management to help develop strategies,
policies and procedures to mitigate risks and implement risk control measures. The third line of defence is the
Internal Audit department, which evaluates and improves the effectiveness of the risk management, control
and governance processes through independent verification of risk control measures. The Internal Audit
department is based in the country head office of each of the Company’s MFIs and audits each branch based
on their risk ratings but at least once a year.
30.3 Key Risk management areas and mitigation
The Group’s key risk management areas are business risk, operational risk, IT risk, finance risk, and legal and
compliance risk.
Risk category Definition Risks Description
Business
risk
Business risk is an
organisation’s
exposure to factors
that will lower its
profit or lead it to fail.
Anything that
threatens a company’s
ability to achieve its
financial and
operational goals is
considered a business
risk.
Growth risk Risks and challenges associated with the Group’s
operational expansion.
Competition
risk
Risk that Group might face for not responding
to the competitive environment or failing to meet
customer needs.
Reputation risk Risk to earnings or capital arising from negative
public opinion.
Climate risk Risk related to potential negative impact of climate
change on the organization.
Health and
safety risk
Potential harm or injury to employees arising from
workplace conditions or activities.
Operational
risk
Operational risk refers
to uncertainties a
company faces when
it attempts to do its
day-to-day business
activities. It can result
from breakdowns in
internal procedures,
people and systems.
Third-party
risk
Potential negative impact arising from relationships
with external service providers.
Human
resource risk
Likelihood of negative results due to a failure
within its human resource department.
Fraud and
integrity risk
Risk of incidents of fraud and misappropriation by
staff or client.
Business
contingency
Potential adverse effects on operation resulting
from unexpected events or disruptions.
IT risk
Information
technology risk is any
threat to business
data, critical systems
and business
processes due to IT
failure. It is the risk
associated with the
use, ownership,
operation,
involvement, influence
and adoption of IT
within an
organization.
IT business
continuity
This risk refers to loss of data in case of a
catastrophic event.
System
vulnerability
This risk refers to the vulnerability of our IT system
to different types of cyber-attacks.
Data privacy
and protection
Risk arising from unauthorised access to sensitive
information.
IT support Risk of delay in resolving IT related issues which
may negatively impact the operations.
System access
control
Risk of misuse of system access.
IT fraud Risk of fraud due to control gap in IT system
and processes.
Data migration Risk of loss of data during the time of data
migration.
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Business risk
The Group manages its business risks by adopting various mitigation strategies at Group level as well as at
subsidiary level. While setting growth targets the Group remains prudent, as uncontrolled growth may lead
to increased overdue loans. Sites for new branches are selected after thorough assessment as per the
operational manual.
When it comes to competition, the Group continuously monitors client satisfaction and focuses on tailoring
its products according to client needs. In order to safeguard its reputational risk, the Group ensures that staff
meet the highest standards in terms of client protection principles and business transparency.
The Group mitigates the physical aspect of the climate risk by avoiding areas for branch expansion that are
highly vulnerable to weather events and having emergency plan in place for quick response when natural
calamity strikes. The transition aspect of climate change is tackled by tracking emissions data and taking
initiatives across the Group for emissions reductions in compliance with related regulatory requirements.
Operational risk
Third-party risk is mitigated by having a contract signed with the vendor with clear terms and conditions,
and signing non-disclosure agreements with parties. Human resource risk is mitigated by attracting, retaining
and developing staff by providing competitive remuneration structures and long-term career opportunities,
and by investing in training and development of all staff. The Company evaluates its human resource risk by
observing the availability of skilled staff within its compensation bands, as well as compliance and regulatory
issues that impact staff, including visas or employment permits needed for its expatriate staff. Fraud and
Integrity risks are mitigated by frequent visits and investigation by the operational supervisory team, the fraud
and misappropriation prevention unit and Internal Audit. Business contingency risk is mitigated by having an
approved business contingency policy in place for guiding the operations during disruptive events and clearly
communicating the policy to relevant teams.
IT risk
The rise of the knowledge economy and the digital revolution has led to organisations becoming increasingly
dependent on information, information processing and especially IT. The Group’s IT business continuity
is safeguarded by maintaining secure data centres with disaster recovery sites, either on premises or in the
cloud. System vulnerability is regularly assessed and virus guards, firewalls and other security measures are
kept up to date. Adequate security measures are ensured to prevent unauthorised access to sensitive data in
order to protect customer data privacy. Sufficient internet connectivity is provided at all branches to ensure
smooth running of operations; proper internet connectivity is provided at head office level. IT issues are
addressed through the JIRA issue management software based on priority. A strong password policy is in
place to prevent unauthorised system access and staff are made aware that password sharing is prohibited.
A proper audit trail is maintained in the system for preventing IT fraud. Data migration risk is tackled by
ensuring skillful staff, adequate back up and parallel running of systems during migration.
Risk category Definition Risks Description
Finance risk
The Group
experiences financial
risks such as credit
risk, liquidity risk,
exchange rate/
currency risk and
interest rate risk
which can adversely
impact the earnings
of the company.
Credit risk Risk that the Group will incur a loss because its
clients or counterparties fail to discharge their
contractual obligations.
Liquidity risk Risk that the Group will be unable to meet its
payment obligations when they fall due under
normal and stress circumstances.
Exchange rate
risk
Possibility of financial loss to the Group arising from
adverse movements in foreign exchange rates.
Inflation rate
risk
Rising cost of living diminishing the borrowers’
repayment capacity; affecting the institution’s
overall financial health.
Interest rate
risk
Risk arising from the possibility of change in the
value of assets and liabilities because of changes
in market interest rates.
Concentration
risk
High concentration of portfolio in a specific
geographic area amplifying the impact of adverse
economic events.
Tax compliance
risk
Adverse consequences faced by an entity due
to failure to adhere to tax laws and regulations.
Legal and
compliance
risk
Financial and other
losses the Group may
suffer as a result of
regulatory changes or
failure to comply with
applicable laws and
regulation.
Local
regulation
Risk of non-compliance to local regulation.
Product
transparency
Risk of negative public opinion for not ensuring
product transparency.
AML risk Threat arising from inadequate measures
to prevent and address money laundering.
30. Risk management continued
30.3 Key Risk management areas and mitigation continued
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Legal and Compliance risk
New changes are proactively discussed with regulators; new requirements (such as minimum capital
requirements) are timely implemented; and the Company’s ASA Model and digital strategy are proactively
discussed with different authorities in order to be well understood when new regulations are being proposed
and drafted. The Group closely monitors the political developments in all operating countries. Anti- Money
Laundering (‘AML’) risks are mitigated by having an effective Know Your Customer (‘KYC’) process, approved
AML policy and appointing an AML officer.
Risks are mitigated through standardised practices that are part of the ASA Model of microfinance.
These include:
• Standardised loan products.
• Basic voluntary deposit services
• Effective and rigid procedures for cost–effective delivery of microcredit and limited deposit services.
• Zero–tolerance on the late deposit of loan instalments by loan officers.
• Group selection without joint liability.
• Loans granted exclusively for income generating activities.
• Full repayment via instalments before eligibility for new loan.
• No incentive or bonus payments for operating staff.
• Frequent client interactions through weekly collections.
• Ongoing assessment of client needs, benefits and satisfaction.
30.4 Financial risks
30.4.1 Credit risk
Credit risk is the risk that the Group will incur a loss because its customers, clients or counterparties failed to
discharge their contractual obligations. The Group manages and controls credit risk by adhering strictly to the
operating procedures set forth in the operational manual which includes setting limits on the amount of risk
it is willing to accept for individual counterparties and for geographical concentrations, and by monitoring
exposures in relation to such limits.
Maximum exposure to credit risk
The maximum credit exposure is equal to the carrying amounts of the financial instruments on the Group’s
statement of financial position except the off book BC portfolio where the risk is determined as per the
contract with BC partners. As mentioned above, the Group reduces its concentration risk by ensuring a widely
diverse portfolio, distributed amongst various countries and continents. At present the Group invests in West
Africa, East Africa, South Asia and South East Asia.
Customer security deposits are cash collateral and are presented as part of Due from customers in the
statement of financial position. These security deposits are considered as collateral for the loans to customers
and therefore reduce the credit risk on these loans.
30. Risk management continued
30.3 Key Risk management areas and mitigation continued
Finance risk
Regarding credit risk, the Group adheres strictly to the operating procedures of the ASA Model, which
includes setting limits on the amount of risk it is willing to accept for each individual borrower, taking a
security deposit where it is customary and allowed under the current licence, preventing over-borrowing and
preventing excessive geographic concentration. The Group continuously monitors changes in the portfolio
and will take immediate action when changes occur.
As for liquidity risk, the Group is diversified across thirteen countries, remains well funded and continues to
have good access to a wide range of funding sources, both at local and holding level. The Company maintains
solid relationships with its debt providers who continue to show strong interest in funding its operations both
locally and at the holding level.
The Group takes the majority of its funding denominated in local currency so that it can avoid its currency
risk by matching the relevant microfinance subsidiary’s local currency assets with local currency liabilities.
For foreign currency funding to the subsidiaries, the Company continues to ensure that close to 100%
of its currency exposure is hedged.
The Group’s strategy in evaluating and managing its interest rate risk is to conduct a cost of funds analysis and
to monitor interest rates in those countries where there is a limit on the amount of interest it may charge.
The Group has a policy on concentration risk to monitor portfolio concentration and encourage a well-
diversified portfolio across different geographical regions in order to limit its exposure to adverse economic
events. Tax compliance risk is mitigated by having competent external tax advisors at entity level and ensuring
full compliance to all tax laws applicable in the jurisdictions.
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Financial Statements
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Geographic distribution of maximum credit exposure as at 31 December 2022.
Cash
and cash
equivalents
(excluding
cash in hand)
USD’000
Loans and
advances to
customers
USD’000
Customer
security
deposit
USD’000
Due
from
banks
USD’000
Other
assets
USD’000
Off-book
portfolio
(BC model)
USD’000
Total
USD’000
West Africa 16,712 82,586 (27,988) 3,791 1,499 – 76,600
East Africa 22,893 85,465 (20,087) 810 506 – 89,587
South Asia 11,272 99,717 (1,345) 8,606 9,163 3,641 131,054
South East Asia 29,261 64,130 (19,474) 5,000 1,069 – 79,986
Non-operating
entities 2,868 – – 20,693 567 – 24,128
Maximum credit
exposure 83,006 331,898 (68,894) 38,900 12,804 3,641 401,355
The Group provides direct lending to customers through the MFIs (owned and controlled by it). In addition,
the Group accepts savings in the countries where it has a deposit taking licence.
Credit risk from lending as at 31 December 2023
Due from
banks
1
USD’000
Gross
loans and
advances to
customer
2
USD’000
Total
lending
USD’000
Total direct lending/IFRS 9 stages
Stage 1
USD’000
Stage 2
USD’000
Stage 3
USD’000
West Africa 3,700 75,263 78,963 72,349 425 2,489
East Africa 6,992 81,229 88,221 80,160 258 811
South Asia 5,252 77,065 82,317 75,649 740 676
South East Asia 4,761 76,155 80,916 72,844 644 2,667
Non-operating entities 21,392 – 21,392 – – –
Total 42,097 309,712 351,809 301,002 2,067 6,643
ECL provision – (6,912) (6,912) (1,540) (12) (5,360)
Coverage ratio
3
2.2% 2.0% 0.5% 0.6% 80.7%
1 Due from banks are neither past due nor credit impaired.
2 Includes interest receivable.
3 Coverage ratio is calculated as the total ECL provision divided by the underlying assets’ gross carrying amount. ECL between stage 1 and
stage 2 has been allocated in proportionate to OLP.
30. Risk management continued
30.4 Financial risks continued
30.4.1 Credit risk continued
There are no significant concentrations of credit risk through exposures to individual customers and, specific
industry/sectors. However, Pakistan holds 18% of the Group’s credit exposure in 2023 (2022: 24%).
Management regularly monitors the concentration risk and manages loan distribution if required.
2023
USD’000
2022
USD’000
Cash and cash equivalents
(excluding cash in hand) 76,215 83,006
Loans and advances to customers 330,157 331,898
Customer security deposit (66,675) (68,894)
Off-book portfolio (BC model)
1
1,428 3,641
Due from banks 42,097 38,900
Other assets
2
10,176 12,804
Maximum credit exposure 393,398 401,355
1 Credit risk on IDFC off-book BC model portfolio is restricted to 5% of the outstanding portfolio.
2 Other assets includes net financial derivatives and excludes prepayments and advance tax.
Geographic distribution of maximum credit exposure as at 31 December 2023.
Cash
and cash
equivalents
(excluding
cash in hand)
USD’000
Loans and
advances to
customers
USD’000
Customer
security
deposit
USD’000
Due
from
banks
USD’000
Other
assets
USD’000
Off–book
portfolio
(BC model)
USD’000
Total
USD’000
West Africa 6,019 71,644 (29,286) 3,700 1,756 – 53,833
East Africa 21,934 103,325 (14,681) 6,991 2,246 – 119,815
South Asia 5,590 80,353 (1,663) 5,252 3,069 1,428 94,029
South East Asia 35,139 74,835 (21,045) 4,762 1,046 – 94,737
Non-operating
entities 7,533 – – 21,392 2,059 – 30,984
Maximum credit
exposure 76,215 330,157 (66,675) 42,097 10,176 1,428 393,398
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Financial Statements
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Financial Statements
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30.4.2 Liquidity risk
Liquidity risk is the risk that the Group will be unable to meet its payment obligations when they fall due under
normal and stress circumstances. Most subsidiaries of the Group are now able to attract third-party funding
and various local currency and USD loans are in place.
Liquidity management is evaluated at the MFI level and on a consolidated Group basis. Each of the Group’s
MFIs are required to meet the financial obligations of their internal and external stakeholders. Failure to
manage liquidity risks may cause the Group to lose business, miss opportunities for growth, or experience
legal or reputational consequences. To mitigate its liquidity management risk, the Group has established
liquidity management policies, published in its operation manual, finance manual and its treasury manual.
The Group is confident it will be able to meet the payment obligations under the aforementioned loans
for various reasons, including but not limited to:
• The main class of assets are loans to customers. Due to the nature of the microfinance business the Group
is engaged in, these loans to customers have short-term maturities, hence the Group is in a position to
generate a constant stream of cash inflows.
• The Group is in the position to accumulate sufficient funds to cover its obligations, although this may entail
limitations on new loan disbursements.
• The Group has been able to receive most of the waivers against covenant breaches from the lenders
and no indication received from lenders for any early repayment.
As at 31 December 2023, the Group had an unrestricted cash balance (including short term deposits) of
USD 48.2 million (2022: USD 55.0 million). The Group is able to fund its operations and budgeted growth of
its loan portfolio from new loan facilities supplied by third parties, security collateral and/or savings provided
by its clients, and internally generated cash flows.
30. Risk management continued
30.4 Financial risks continued
30.4.1 Credit risk continued
Credit risk from lending as at 31 December 2022
Due from
banks
1
USD’000
Gross
loans and
advances to
customer
2
USD’000
Total
lending
USD’000
Total direct lending/IFRS 9 stages
Stage 1
USD’000
Stage 2
USD’000
Stage 3
USD’000
West Africa 3,791 85,885 89,676 82,270 1,061 2,554
East Africa 810 88,795 89,605 87,964 269 562
South Asia 8,607 109,591 118,198 96,234 2,943 10,414
South East Asia 5,000 67,978 72,978 63,625 315 4,038
Non-operating entities 20,692 – 20,692 – – –
Total 38,900 352,249 391,149 330,093 4,588 17,568
ECL provision – (15,900) (15,900) (1,235) (859) (13,806)
Coverage ratio
3
4.5% 4% 0.4% 18.7% 78.6%
1 Due from banks are neither past due nor credit impaired.
2 Includes interest receivable.
3 Coverage ratio is calculated as the total ECL provision divided by the underlying assets’ gross carrying amount.
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Financial Statements
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30. Risk management continued
30.4 Financial risks continued
30.4.2 Liquidity risk continued
The table below shows undiscounted cash flow analysis of liabilities according to when they are expected to be recovered or to be settled.
Liabilities FY2023
in USD’000 On demand <3 months 3–12 months
Sub–total
1–12 months 1–5 years Over 5 years
Sub–total
>12 months
No fixed
maturity Total
Debt issued and other borrowed funds 24,680
1
44,250 89,156 158,086 115,325 – 115,325 – 273,411
Due to customers 33,045 20,576 25,466 79,087 8 – 8 – 79,095
Lease liability – 98 554 652 2,611 9 2,620 – 3,272
Derivative liabilities – 29 40 69 9 – 9 – 78
Other liabilities 2,633 6,307 6,644 15,584 302 144 446 23,533 39,563
Provisions – – 1,428 1,428 – – – – 1,428
60,358 71,260 123,288 254,906 118,255 153 118,408 23,533 396,847
Liabilities FY2022
in USD’000 On demand <3 months 3-12 months
Sub-total
1-12 months 1-5 years Over 5 years
Sub-total
>12 months
No fixed
maturity Total
Debt issued and other borrowed funds 68,077
2
33,918 69,177 171,172 90,129 – 90,129 – 261,301
Due to customers 15,098 32,704 36,344 84,146 9 – 9 – 84,155
Lease liability 142 150 690 982 2,089 20 2,109 – 3,091
Derivative liabilities – 190 266 456 – – – – 456
Other liabilities 395 4,518 5,410 10,323 662 132 794 23,283 34,400
Provisions – 285 682 967 71 – 71 – 1,038
83,712 71,765 112,569 268,046 92,960 152 93,112 23,283 384,441
1 This includes loans amounting to USD 23.0 million on which waivers had not been received at the balance sheet date. Subsequently waivers for all breached loans amounting to USD 23.0 million have been received.
2 This includes loans amounting to USD 65.0 million on which waivers had not been received at the balance sheet date. Subsequently waivers for loans amounting to USD 64.0 million have been received .
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Financial Statements
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30. Risk management continued
30.4 Financial risks continued
30.4.2 Liquidity risk continued
The table below shows undiscounted cash flow analysis of assets according to when they are expected to be recovered or to settled.
Assets FY2023
in USD’000 On demand <3 months 3-12 months
Sub-total
1-12 months 1-5 years Over 5 years
Sub-total
>12 months
No fixed
maturity Total
Cash at bank and in hand 46,819 1,733 27,877 76,429 – – – – 76,429
Loans and advances to customers 10,698 189,612 129,455 329,765 392 – 392 – 330,157
Due from banks – 3,859 5,960 9,819 10,886 – 10,886 21,392 42,097
Equity investments at FVOCI – – – – – – – 273 273
Derivative assets – 105 2,345 2,450 – – – – 2,450
Other assets – 2,784 9,117 11,901 1,589 – 1,589 – 13,490
57,517 198,093 174,754 430,364 12,867 – 12,867 21,665 464,896
Assets FY2022
in USD’000 On demand <3 months 3-12 months
Sub-total
1-12 months 1-5 years Over 5 years
Sub-total
>12 months
No fixed
maturity Total
Cash at bank and in hand 48,666 1,459 32,992 83,117 – – – – 83,117
Loans and advances to customers 11,070 192,736 127,495 331,301 597 – 597 – 331,898
Due from banks – 3,896 12,717 16,613 1,595 – 1,595 20,692 38,900
Equity investments at FVOCI – – – – – – – 244 244
Derivative assets – 1,871 5,260 7,131 724 – 724 – 7,855
Other assets – 4,489 5,132 9,621 349 – 349 – 9,970
59,736 204,451 183,596 447,783 3,265 – 3,265 20,936 471,984
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In summary, the Group takes a number of measures to manage its foreign currency exposure:
• Investments are only made in countries that show a reasonable level of macroeconomic stability. A detailed
macroeconomic and socio- political assessment is carried out before the Group decides to invest in a
certain country.
• Excess retained earnings in the operating entities are distributed to the holding entities. Equity hedging
instruments are considered as part of the equity hedging policy.
• The Group endeavours to procure its MFIs to secure local currency loans (instead of foreign currency
loans) to the extent possible or deemed commercially advantageous.
• The Group applies hedging instruments on foreign currency loans in any of its operating and holding
entities.
Simulation: Foreign currency translation reserve
FX
translation
reserve
actual
2023
USD’000
FX
translation
reserve after
-10% rate
2023
USD’000
Movement
2023
USD’000
FX
translation
reserve
actual
2022
USD’000
FX
translation
reserve after
-10% rate
2022
USD’000
Movement
2022
USD’000
West Africa (59,644) (63,475) (3,831) (46,638) (52,595) (5,957)
East Africa (6,012) (8,735) (2,724) (2,551) (5,038) (2,487)
South Asia (40,792) (43,258) (2,466) (33,324) (37,028) (3,703)
South East Asia (5,134) (6,452) (1,318) (5,197) (6,683) (1,486)
Non-operating entities (416) (433) (17) (413) (432) (19)
Total (111,998) (122,353) (10,356) (88,123) (101,776) (13,652)
Analysis of the actual exchange rate fluctuations against the USD for the period 2023 shows different trends
for all the operating currencies. The annual exchange rate fluctuations are between 100% and 1%, but most
moved within 2% to 43%. For the simulation of foreign currency effects, the Company has therefore assumed
an additional 10% movement year on year in these currencies as compared to USD.
The following overview shows the actual foreign currency exchange results by country for 2023 as well as the
simulation of the impact of a 10% downward movement of the FX rates on the foreign exchange results.
As at 31 December 2023 a 10% downward movement of FX rates against the USD has a positive impact on
the foreign currency exchange result of USD -78K (2022: USD 3K). The lower impact on the result of the
Company results from the decrease in short term intercompany USD loans, which cannot be hedged.
30. Risk management continued
30.4 Financial risks continued
30.4.2 Liquidity risk continued
Changes in liabilities arising from financing activities:
FY 2023
1 January
2023
USD’000
Cash flows
USD’000
Non-cash
movement
USD’000
Foreign
exchange
movement
USD’000
31 December
2023
USD’000
Debt issued and borrowed
funds 261,301 31,251 – (19,141) 273,411
Lease liabilities 3,091 (3,690) 3,676 195 3,272
Total liabilities from
financing activities 264,392 27,561 3,676 (18,946) 276,683
FY 2022
1 January
2022
USD’000
Cash flows
USD’000
Non-cash
movement
USD’000
Foreign
exchange
movement
USD’000
31 December
2022
USD’000
Debt issued and borrowed
funds 318,674 (25,370) – (32,003) 261,301
Lease liabilities 3,459 (4,353) 4,114 (129) 3,091
Total liabilities from
financing activities 322,133 (29,723) 4,114 (32,132) 264,392
30.4.3 Foreign exchange rate risk
Currency risk is the possibility of financial loss to the Group arising from adverse movements in foreign
exchange rates. Currency risk is a substantial risk for the Group, as most loans to MFIs and borrowers are in
local currency in countries where currency depreciation against the USD is often considered less predictable.
At present the Group manages currency risk mainly through natural hedging, i.e. by matching the MFI’s local
currency assets consisting of the MFI’s loan portfolio with local currency liabilities. The Group’s risk policy
allows the Group treasurer the possibility of hedging with instruments such as swaps and forward contracts if
and when appropriate. In order to mitigate the foreign exchange risk on foreign currency loans, ASA Pakistan,
ASA Myanmar, ASA Sierra Leone, ASA Kenya and ASA Zambia have entered into hedging agreements. The
Group applies hedge accounting to the foreign currency loans and related hedge contracts. Reference is made
to note 37.
While the Group faces significant translation exposure on its equity investments in local MFIs (as the
functional currency of the Group is USD), the Group has implemented an equity hedging policy. The policy
entails a frequent review of expected currency devaluations compared to the costs for equity hedging
instruments. The Group has not used equity hedging instruments in 2023. In addition the Group has a policy
to distribute excess retained earnings at its subsidiaries to the holding entities while maintaining a sufficient
capital adequacy ratio.
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Financial Statements
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With all other variables held constant, the Group’s profit before tax is affected through the impact on floating
rate borrowings, as follows:
Increase in
basis points
Decrease in
basis points
2023 2022
Effect on profit before tax Effect on profit before tax
USD’000 USD’000 USD’000 USD’000
USD +100 –100 687 (687) 806 (806)
PKR +100 –100 98 (98) 77 (77)
INR +100 –100 – – 10 (10)
30.5 Managing interest rate benchmark reform and associated risks
Following the decision by global regulators to phase out Interbank Offered Rates (‘IBORs’) and replace them
with alternative reference rates, the Group has established a project led by Group Treasury to manage the
transition for any of its contracts that could be affected. The project provides periodic updates to senior
management and the Board. The Group has already completed the transition of a significant portion of its
LIBOR exposure to Risk free rates (‘RFRs’) and other benchmark rates. As of 31 December 2023, the Group
has loans amounting to USD 16.0 million which are based on USD six-month LIBOR. These remaining loans
are in discussions with the counterparties to be amended to term SOFR rates by the end of June 2024, prior
to the cessation of the availability of synthetic six-month LIBOR rates from 30 September 2024.
Derivatives
The Group holds forward and cross currency interest rate swaps for risk management purposes which are
designated in cash flow hedging relationships. The interest rate swaps have floating legs that are indexed
to either Euribor or LIBOR. The Group’s derivative instruments are governed by contracts based on the
International Swaps and Derivatives Association (‘ISDA’) master agreements. On 23 October 2020, the ISDA
published its IBOR fall back protocol and supplements, which are designed to address transition for those
derivative contracts still outstanding on the permanent cessation of an IBOR. The ISDA fall back spread
adjustments were updated as of 16 April 2021 in line with new guidance from the FCA on IBOR rates.
The Group’s current hedge contracts factor in the spread adjustments where IBOR rates are still applicable.
30. Risk management continued
30.4 Financial risks continued
30.4.3 Foreign exchange rate risk continued
Simulation: Foreign exchange profit and loss
Foreign
exchange
profit and
loss actual
2023
USD’000
Foreign
exchange
profit and
loss after
–10% rate
2023
USD’000
Movement
2023
USD’000
Foreign
exchange
profit and
loss actual
2022
USD’000
Foreign
exchange
profit and
loss after
–10% rate
2022
USD’000
Movement
2022
USD’000
West Africa (739) (861) (122) 350 182 (168)
East Africa (272) (313) (41) (37) 216 254
South Asia (180) (182) (2) (259) (266) (6)
South East Asia (20) 239 259 (614) (475) 139
Non-operating entities (757) (930) (172) (998) (1,212) (216)
Total (1,968) (2,047) (78) (1,558) (1,555) 3
30.4.4 Interest rate risk
Interest rate risk is the risk that profitability is affected by fluctuations in interest rates. The greatest interest
rate risk the Group experiences occurs when the cost of funds increases faster than the Group can or is willing
to adjust its lending rates. The Group’s strategy in evaluating and managing its interest rate risk is to consider
any risk at the pre-investment stage, to conduct a cost of funds analysis and to consider interest rates in
particular, where there is a limit on the amount of interest it may charge, such as in Myanmar and Tanzania.
The credit methodology of the MFIs determines that loans to microfinance clients have short-term maturities
of less than one year and at fixed interest rates. Third-party loans to MFIs, sourced from both local and
international financial institutions, mostly have relative short terms between one and three years. 29% (2022:
37%) of the consolidated debt has variable interest rates. Depending on the extent of the exposure and
hedging possibilities with regard to availability of hedging instruments and related pricing, the Group might
actively hedge its positions to safeguard the Group’s profits and to reduce the volatility of interest rates by
using forwards, futures and interest rate swaps. The very short tenor of the loans provided to microfinance
dampens the effect of interest rate fluctuations. The following table demonstrates the sensitivity to a
reasonably possible change in interest rates on the loans and borrowings affected.
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Financial Statements
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30.7 Legal and compliance risk
Legal and compliance risks in the countries that the subsidiaries or MFIs are active in will be mitigated through
continuous monitoring of the regulatory and legal environment, through inter alia tier-one law firms and the
local corporate secretaries and compliance officers in certain countries. In most countries the relevant
microfinance subsidiary also maintains direct relationships with the regulator, including central banks. In
addition, the Group believes it is, through its local and international network, well positioned to identify any
relevant changes in the law that will have a material impact on any of the businesses it invests in. A number
of investments in the MFIs are made by ASAI NV in the Netherlands. The Netherlands has entered into an
extensive network of Bilateral Investment Treaties that offer compensation in case any of such investments
are nationalised or expropriated by a country in which an investment is made. Currently the investments
in the Philippines, Sri Lanka, Uganda, Kenya and Ghana are owned by ASAI NV, an indirectly owned but wholly
controlled subsidiary of the Group.
Product transparency is also key to the Group’s strategy in mitigating its legal and compliance risk. Because
the education and knowledge levels of the Group’s target clients are low, the Group aims to be transparent
in its products and prices. The Group established a Legal and Compliance department headed by the General
Counsel. The General Counsel assigns and supervises all legal matters involving the Group. The General
Counsel, Deputy General Counsel and Group Compliance Manager establish and maintain an operationally
independent Compliance function at the corporate level led by the Group. Whilst the General Counsel
bears overall responsibility for the Compliance function, the General Counsel has delegated day-to-day
responsibility for managing the Compliance function to the Group Compliance Manager who performs
the compliance duties independently. The Group Compliance Manager is responsible for overseeing and
implementing the Group compliance framework, including the Group compliance policy (the ‘Compliance
Policy’). The Compliance Policy sets out the principles and standards for compliance and management of
compliance risks in the Group. The Group seeks to reduce compliance risks taking into account the nature,
scale and complexity of the business and ensures the policies are in alignment with the Group strategy and
its core values.
30.8 Strategic risk
Strategic risk is the current or prospective risk to earnings and capital arising from changes in the business
environment and from adverse business decisions, improper implementation of decisions or lack of
responsiveness to changes in the environment. The Group evaluates its strategic risk by analysing its cost
reduction and growth, its liquidity management and its competition and reputational risk.
Competition and reputational risk are frequent in the microfinance industry. The Group defines reputational
risk as the risk to earnings or capital arising from negative public opinion. The Group believes that reputational
risk may impact its ability to sell products and services or may limit its access to capital or cash funds. To
mitigate any competition or reputational risk, the Group evaluates the introduction of highly subsidised
competitors, movements in average borrowing rates, and information sharing with different agencies.
30. Risk management continued
30.5 Managing interest rate benchmark reform and associated risks continued
Hedge accounting
The Group has evaluated the extent to which its cash flow hedging relationships are subject to uncertainty
driven by IBOR reform as at 31 December 2023. The Group’s hedged items and hedging instruments continue
to be indexed to Euribor or synthetic LIBOR rates. These benchmark rates are quoted each day and the IBOR
cash flows are exchanged with counterparties as usual. The calculation methodology of Euribor changed
during 2019. In July 2019, the Belgian Financial Services and Markets Authority granted authorisation with
respect to Euribor under the European Union Benchmarks Regulation. This allows market participants to
continue to use Euribor for both existing and new contracts, and the Group expects that Euribor will continue
to exist as a benchmark rate for the foreseeable future.
30.6 Climate-related risks
The Group and its customers may face climate-related risks in the future. These risks include the threat of
financial loss and adverse non-financial impacts that encompass the political, economic and environmental
responses to climate change. The key sources of climate risks have been identified as physical and transition
risks. Physical risks arise as the result of acute weather events such as hurricanes, floods and droughts,
and longer-term shifts in climate patterns, such as sustained higher temperatures and rising sea levels.
Transition risks may arise from the adjustments to a net-zero economy, e.g., changes to laws and regulations,
litigation due to failure to mitigate or adapt, and products and services due to changes in consumer behaviour
and investor demand. These risks are receiving increasing regulatory, political and societal scrutiny, both
within the operating country and internationally. While certain physical risks may be predictable, there are
significant uncertainties as to the extent and timing of their manifestation. For transition risks, uncertainties
remain as to the impacts of the impending regulatory and policy shifts, changes in consumer demands and
supply chains.
The Group is making progress on embedding climate risk into its Risk framework, including the development
of appropriate risk appetite metrics and the creation of a Sustainability Committee, which is responsible for
developing Group-wide policies, processes and controls to incorporate climate risks into the management
of principal risk categories, appointing a Climate Officer for each operating subsidiary and setting up SMART
targets to reduce GHG emissions.
The impact of climate-related risks has been assessed on a number of reported amounts and the
accompanying disclosures. Refer to page 61 for details in relation to climate-related risks.
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31. Commitments
The Group agreed certain commitments to BC Partners under the BC model in ASA India. Reference is made
to note 13. As per the current model ASA India holds 5% risk on the portfolio managed on behalf of IDFC.
As of 31 December 2023, the risk of the Group on such BC portfolio stands at USD 0.6 million (2022:
USD 0.9 million).
To support the Temenos Transact implementation, ASA Pakistan signed an agreement with NDC Tech for
Managed Application and Infrastructure Services and Software licenses on 25 October 2022. Agreement
is for two years starting early 2024. Total cost USD 0.9 million.
On 3 January 2024, the group agreed a change request with CSHARK Spółka z ograniczoną
odpowiedzialnością (Ltd.) to develop and roll-out the digital financial services application to our clients.
Total value of the change request is EUR 0.4 million.
The Group has signed a master agreement on 31 March 2023 with Systems Ltd on Infrastructure Managed
Services and implementation Support for Temenos Transact and Digital Financial Services App in Ghana and
subsequent countries where DFS systems are implemented. Total cost for Infrastructure managed services
is USD 1.1 million for 3 years of which USD 200K has been paid by December 2023. The Temenos Transact
Implementation cost is estimated at USD 450K of which USD 220K has been paid as per 31 of December
2023.
There are no other contingent liabilities at the balance sheet date except for the pending litigation claims
disclosed in note 34.
32. Related party disclosures
32.1 Key management personnel
The Dhaka office is managed by a team of experienced microfinance experts who have previously held senior
positions in ASA NGO Bangladesh, and have many years of expertise in managing and supporting MFIs across
Asia and Africa. In addition to supervising the performance of the Group’s local MFIs, executive management
in Dhaka is primarily responsible for finance and accounts (including the Chief Financial Officer), risk
management, audit, IT, human resource management, and corporate secretarial functions for the Group.
All key management personnel stationed in Dhaka are on the payroll of ASAI NV.
The Amsterdam office comprises key management personnel who provides support on treasury, investor
relations, legal, specialised accounting support and the management of business development projects.
They are on the payroll of ASAI NV.
The experienced CEO’s that are deployed in the countries are part of key management personnel. They are
paid by their respective entities. The Group CEO (based in Amsterdam) is a member of the Board and paid
by ASA International Group plc.
The Group CEO (based in Amsterdam) is a member of the Board and paid by ASA International Group plc .
Remuneration of Directors
In 2023, the Directors of the Group received total compensation of USD 1.1 million (2022: USD 1.12 million).
Total remuneration to key management personnel of the Group
2023
USD’000
2022
USD’000
Short-term employee benefits 1,890 2,273
1,890 2,273
Total remuneration takes the form of short-term employee benefits for the Group. In 2023, total remuneration
paid to key management personnel of the Group amounted to USD 1.9 million (2022: USD 2.3 million).
No-post employment pension and medical benefits are accruing to Directors under defined benefit schemes.
The aggregate of emoluments of the highest paid Director was USD 414K (2022: USD 425K).
Long-Term Incentive Plan
Please refer to note 8.4 for details of LTIP .
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32.3 Relationship agreement
Relationship agreement with the Controlling Shareholder Group
The Group, its founders and Catalyst Continuity (jointly the “Controlling Shareholders”) have entered into
a relationship agreement (the ‘Relationship Agreement’), the principal purpose of which is to ensure that the
Group will be able, at all times, to carry out its business independently of the members of the Controlling
Shareholder Group and their respective associates. The Relationship Agreement contains undertakings from
each of the members of the Controlling Shareholder Group that (i) transactions and relationships with it and
its associates will be conducted at arm’s length and on normal commercial terms, (ii) neither it nor any of its
associates will take any action that would have the effect of preventing the Company from complying with
its obligations under the Listing Rules, and (iii) neither it nor any of its associates will propose or procure the
proposal of a shareholder resolution which is intended or appears to be intended to circumvent the proper
application of the Listing Rules. The Relationship Agreement also sets forth the conditions for appointment of
Non-Executive Directors by Controlling Shareholders. For so long as the Group has a controlling shareholder,
the UK Listing Rules require the election of any independent Director to be approved by majority votes of
both (i) the shareholders as a whole and (ii) the shareholders excluding any controlling shareholder.
32.4 Other related parties
A list of related parties with which the Group has transactions is presented below. The transactions in 2023
and 2022 and the balances per the end of the year 2023 and 2022 with related parties can be observed
in notes below. Related party transactions take place at arm’s length conditions.
Name of related party Relationship
CMI Major shareholder (29.2%)
Sequoia Service provider to the Company
ASA NGO Bangladesh Service provider to the Company
MBA Philippines Business partner
IDFC Minority shareholder in ASA India
ASAICH and CMIIH Subsidiaries of CMI
CMIMC Holding company of founders CMI
ASAIG plc EBT Trust to hold LTIP shares
CMIC Investment manager of CMI
CMII Subsidiary of CMI
ASA Social Services Service provider to the Parent
CIMS BV Service provider to the Parent
32. Related party disclosures continued
32.2 Subsidiaries
Country of Incorporation 2023 ownership 2022 ownership
ASAIH subsidiaries:
 ASA India India 90.02% 90.02%
 Pagasa Consultancy India 99.99% 99.99%
 Pinoy India 99.99% 99.99%
  Pagasa ng Masang Pinoy
Microfinance, Inc The Philippines N/A
1
N/A
1
 PT PAGASA Consultancy Indonesia 99.00% 99.00%
 A1 Nigeria Nigeria 100% 100%
 ASHA MFB Nigeria 99.99% 99.99%
 ASIEA Nigeria N/A N/A
 ASA Pakistan Pakistan 99.99% 99.99%
 ASA Tanzania Tanzania 99.99% 99.99%
  ASA Zanzibar Tanzania 99.99% 99.99%
 ASA Myanmar Myanmar 99.99% 99.99%
 ASA Zambia Zambia 99.99% 99.99%
 ASA Rwanda Rwanda 99.99% 99.99%
 ASA Sierra Leone Sierra Leone 99.99% 99.99%
ASAI NV subsidiaries: The Netherlands N/A N/A
 PPFC The Philippines 100% 100%
 ASA S&L Ghana 100% 100%
 CMI Lanka Sri Lanka 100% 100%
  Lak Jaya Sri Lanka 97.14% 97.14%
 ASA Lanka Sri Lanka 100% 100%
 ASA Kenya Kenya 100%
2
100%
2
 ASA Uganda Uganda 99.99% 99.99%
 AMSL Bangladesh 95% 95%
 ASAI I&M The Netherlands 100% 100%
  ASA Dwaso Ghana 100% 100%
1 ASAI officials/representatives control the governing body and the Board.
2 ASAIH holds 0.5% of the shares.
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The summarised financial information of Lak Jaya and ASA India as at 31 December 2023 is as follows:
31 December 2023 31 December 2022
Lak Jaya
USD’000
ASA India
USD’000
Lak Jaya
USD’000
ASA India
USD’000
Current assets 6,556 13,096 5,317 27,079
Non-current assets 131 295 156 394
Current liabilities 5,065 26,143 4,074 34,965
Non-current liabilities 293 888 247 1,206
Net Operating Income 2,090 4,554 1,626 7,186
Net loss (40) (4,489) (564) (6,445)
Non-controlling interest 38 (1,362) 33 (868)
The following table summarises financial information for each subsidiary that has material NCI to the Group.
The voting rights are similar to NCI’s shareholding percentage in India but in the case of Lak Jaya the Group holds
91.3% of the voting rights. The amounts disclosed for each subsidiary are before inter-company eliminations:
31 December 2023 31 December 2022
Lak Jaya ASA India Lak Jaya ASA India
Total no. of shares 10,704,955 195,950 10,704,955 195,950
Shares held by ASAI Group 10,398,950 176,369 10,398,950 176,369
Shares held by NCI 306,005 19,581 306,005 19,581
NCI % 2.86% 9.98% 2.86% 9.98%
31 December 2023 31 December 2022
Lak Jaya
USD’000
ASA India
USD’000
Lak Jaya
USD’000
ASA India
USD’000
Summarised statement of financial position:
Net assets 1,329 (13,640) 1,152 (8,698)
Net assets attributable to NCI 38 (1,362) 33 (868)
Summarised statement of profit or loss and other comprehensive income:
Net operating income 2,090 4,554 1,626 7,186
Net loss after tax (40) (4,489) (564) (6,445)
Loss allocated to NCI (1) (448) (16) (643)
Summarised statement of cash flow:
Cash flow from operation activities 4,520 12,710 2,219 41,755
Cash flow from investing activities (4,406) 17 (10) (36)
Cash flow from financing activities (75) (7,181) (1,364) (47,522)
Net cash flow attributable to NCI 1 554 24 (579)
Reference to note 32.2, the remaining shares in Pagasa Consultancy, Pinoy, A1 Nigeria, ASHA Nigeria, ASA
Pakistan, ASA Tanzania, PPFC, ASA Uganda, CMI Lanka and AMSL are held either by employees nominated
by the Group or by ASAI I&M, CMI or CMII. Hence those are not treated as non-controlling shares.
32. Related party disclosures continued
32.4 Other related parties continued
Income from
related parties
USD’000
Expenses to
related parties
USD’000
Amount owed by
related parties
USD’000
Amount owed to
related parties
USD’000
CMI 31 December 2023 – – – 21,392
31 December 2022 – – – 20,692
Sequoia 31 December 2023 165 25 41 6
31 December 2022 117 47 145 10
MBA Philippines 31 December 2023 1,104 – 61 15
31 December 2022 890 – 86 31
Jana 31 December 2023 – – 1,500 11
31 December 2022 – – 139 –
Fincare 31 December 2023 – – 97 –
31 December 2022 – – – –
IDFC 31 December 2023 2,160 – 4,740 1,257
31 December 2022 2,045 – 2,224 285
CIMS BV 31 December 2023 – – 22 –
31 December 2022 – – 18 –
ASAIG plc EBT 31 December 2023 – – 686 –
31 December 2022 – – – –
32.5 Reporting dates of subsidiaries
All of the Group’s subsidiaries have reporting dates of 31 December, with the exception of ASA India, Pinoy,
Pagasa Consultancy and ASA Myanmar (where the market standard reporting date is 31 March). These
entities have provided financial statements for consolidation purposes for the year ended 31 December.
32.6 Non-controlling interest
The Company reports non-controlling interest (‘NCI’) in its subsidiaries ASA India and Lak Jaya. The NCI in
ASA India, having its principal place of business in India, amounts to 9.98%. ASA India did not pay any dividend
in 2023 and 2022. The NCI in Lak Jaya, having its principal place of business in Sri Lanka, amounts to 2.86%.
Lak Jaya did not declare any dividend in 2023 and 2022 .
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33. Subsequent events disclosure
As per 1 April 2024 ASAI NV acquired the outstanding principal debt and interest receivable totaling
USD 4.4 million held by ASA Myanmar from various international lenders managed by Symbiotics and
Frankfurt School Financial Services. The company had already made an advance payment for this assignment
of USD 955K in 2023 (note 18.3).
On 25 February 2024, ASAI reached a key milestone, by migrating all clients in Pakistan from our incumbent
loan system to the Temenos Transact Core Banking System. This migration enables ASA Pakistan to start
taking deposits and to grow their client base in a highly regulated environment.
34. Contingent liabilities
ASA India
A demand was raised by income tax authorities after the disallowance of some expenditures such as the
misappropriation of funds, gratuity etc. for the assessment years (AY) 2012-2013. The disallowance amount
for AY 2011-2012 is USD 177K and for AY 2012-2013 is USD 69K. The matters are pending before the
Commissioner of Taxes (Appeals). In addition, another demand has been raised by the income tax authorities
for USD 1.1 million for the AY 2012-2013 in December 2019 which has been challenged before the relevant
assessing officer. ASA India has also applied for a stay order of the demand.
In November 2022, the revenue authority adjusted USD 1.4 million against tax refund for AY 2013-2014
to 2022-2023 for such demand. ASA India has submitted to file a writ petition against such adjustment.
The entity took a provision of USD 560K against such demand.
Lak Jaya
A demand was raised by the Department of Inland Revenue (‘IRD’) for 2016-2017 and 2017-2018 amounting
to USD 332K and USD 412K, respectively, by disallowing certain expenses. The Company has filed an appeal
and submitted necessary documentation. The matter is pending to the Commissioner of IRD. The entity took
a provision of USD 36K against such demand.
IRD has raised another tax demand, including a penalty of LKR 74 million (USD 412K) regarding Corporate
Income Tax for the tax year 2017/ 2018 by disallowing the truncated rate applied by the entity. The Company
filed an appeal against that demand which is pending with Commissioner Appeal. A provision of USD 93K
has been taken against such demand.
ASA Pakistan
A demand was raised by the Federal Board of Revenue in Pakistan for USD 390K by disallowing certain
expenses against the return of AY 2015-2016. The management team filed an appeal and this came in
the Company’s favour, and demand liability is reversed.
The WHT monitoring notice (audit) came for the Tax year 2020. The Physical Hearing is done, waiting
for further notification. No provision is made against this .
ASA Uganda
A demand of USD 155K was raised by the Uganda Revenue Authority (‘URA’) regarding applicability of
withholding tax on dividend payment to ASAI NV. The Company is in the process of appeal against the URA.
No provision has been taken against such demand as management concludes that the merit of the demand
is unlikely to be successful.
ASA Tanzania
The Tanzania Revenue Authority (‘TRA’) claimed a tax demand of USD 2.5 million regarding applicability of
excise duty on loan processing fees, VAT on intercompany transactions, withholding tax on stock dividend
and tax on deferred income. The Company appealed against the TRA. The entity has taken a provision of
USD 1.7 million against such claim.
ASA Nigeria
ASA Nigeria is in breach of a regulatory limit of PAR 30 ratio at the balance sheet date. The matter was
reported to Central Bank of Nigeria (CBN). No provision was created in this regard as management concludes
that any penalty imposition by CBN in this regard is unlikely.
35. Capital management
ASA International Group Plc is registered as a public limited company, incorporated in England and Wales with
the registered number 11361159 and with its registered office situated at Highdown House, Yeoman Way
Worthing, West Sussex BN99 3HH, United Kingdom. It had listed its shares on the premium listing segment
of the London Stock Exchange on 18 July 2018. The Group is not subject to externally imposed capital
requirements and has no restrictions on the issue and re-purchase of ordinary shares.
Many of the Group’s operating subsidiaries are regulated and subject to minimum regulatory capital
requirements. As of 31 December 2023, the Group and its subsidiaries were in full compliance with minimum
regulatory capital requirements.
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36. Financial instruments
The carrying value of the Group’s financial assets and liabilities as of 31 December 2023 are the best
approximation of the fair value.
• The carrying amounts of Cash and cash equivalents, Due from banks, Due to customers, Other assets
and Other liabilities approximate the fair value due to the short-term maturities of these items.
• Loans and advances to customers are short term and small ticket loans (six to twelve months) and
therefore, the carrying value of these loans are best approximate of their fair value.
• Regarding the ‘Debt issued and other borrowed funds’, this amount reflects the loans from third parties
on a holding level as well as the loans provided by third parties directly to the subsidiaries of ASA
International. The loans are held at amortised cost. The carrying amount is the best approximation
of the fair value because the funding interest rates have not materially changed over the recent years.
37. Hedge accounting
Forward contracts
The Group applies hedge accounting to USD and EUR loans provided to subsidiaries reporting in foreign
currencies and the related forward contracts. The foreign currency risk exposure of the USD and EUR loans
and the potential negative impact on net result of the subsidiaries are being mitigated by way of these forward
contracts. Any positive impact is therefore also limited. ASA International has only entered into non-
deliverable forward contracts. Management considers the hedges as cash flow hedges. The formal designation
and documentation of the hedging relationship and the entity’s risk management objective and strategy for
undertaking the hedge are documented in the individual files and memos for every forward contract.
Swaps
As at 31 December 2023, the Group had eight cross-currency interest rate swap agreements in place. Please
refer to note-19.2 for details.
The Group applies the qualitative approach for prospective testing effectiveness because the critical terms
of the hedged items and hedging instruments are identical. The Group applies a rollover hedge strategy when
no forward instruments are available at reasonable pricing for the full term of the hedged item. In those cases
the Group accepts a rollover risk. Retrospective effectiveness is measured by comparing the change in the fair
value of the actual derivative designated as the hedging instrument and the change in the fair value of a
hypothetical derivative representing the hedged item.
There is an economic relationship between the hedged item and the hedging instrument as the terms of the
forward contracts and swap match the terms of the fixed rate loan (i.e., notional amount, maturity, payment
and reset dates). The Group has established a hedge ratio of 1:1 for the hedging relationships as the underlying
risk of the interest rate swap and forward contracts are identical to the hedged risk component. To test the
hedge effectiveness, the Group uses the hypothetical derivative method and compares the changes in the fair
value of the hedging instrument against the changes in fair value of the hedged item attributable to the
hedged risk.
The hedge ineffectiveness can arise from:
• Different interest rate curve applied to discount the hedged item and hedging instrument
• Differences in the timing of the cash flows of the hedged items and the hedging instruments
The Group assessed that, it had no ineffectiveness during 2023 in relation to the foreign currency hedges .
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37. Hedge accounting continued
Reference is made to note 30.4.3 for the strategy for currency exchange risk. Additional information on the
hedged items and hedging instruments as per 31 December 2023 is provided below:
As at 31 December 2023
ASA
Pakistan
USD’000
ASA
Sierra
Leone
USD’000
ASA
Myanmar
USD’000
ASA
Kenya
USD’000
ASAI
NV
USD’000
ASA
Zambia
USD’000
Total
USD’000
Fair value of derivative assets – 959 – 1,320 – 171 2,450
Fair value of derivative liabilities 69 – – – 9 – 78
Notional amount hedged
foreign currency loans 17,646 2,925 – 11,653 993 1,026 34,243
Period in which the cash flows
are expected to occur:
 cash flows in 2024 17,646 2,105 – 4,992 – 1,026 25,769
 cash flows in 2025 – – – – – – –
 cash flows in 2026 – – – 3,743 993 – 4,736
Total cash flows 17,646 2,105 – 8,735 993 1,026 30,505
Expected period to enter into the
determination of profit or loss:
  amortisation of forward
points in 2024 724 107 – 302 41 40 1,214
  amortisation of forward
points in 2025 – – – – 41 – 41
  amortisation of forward
points in 2026 – – – 21 18 – 39
Total amortisation of forward
points 724 107 – 323 100 40 1,294
Amounts recognised in OCI
during the period:
  for amortisation of forward
points/currency basis spread 2,139 155 7 320 15 117 2,753
  for adjustment of net
interest on swap – (11) – 285 – 16 290
  for changes in fair value of
the forward contracts/
swaps 3,596 343 (42) 1,356 (9) 29 5,273
  for recycling of FX result of
foreign currency loans (7,671) (428) – (1,648) (20) (218) (9,985)
Total amounts recognised in
OCI during the period (1,936) 59 (35) 313 (14) (56) (1,669 )
As at 31 December 2022
ASA
Pakistan
USD’000
ASA
Sierra
Leone
USD’000
ASA
Myanmar
USD’000
ASA
Tanzania
USD’000
ASA
India
USD’000
ASA
Zambia
USD’000
Total
USD’000
Fair value of derivative assets 7,001 711 131 – – 12 7,855
Fair value of derivative liabilities – – – – – 456 456
Notional amount hedged
foreign currency loans 40,243 1,500 1,000 – – 1,000 43,743
Period in which the cash flows
are expected to occur:
 cash flows in 2023 40,243 – 1,000 – – 750 41,993
 cash flows in 2024 – 1,000 – – – 250 1,250
 cash flows in 2025 – 500 – – – – 500
Total cash flows 40,243 1,500 1,000 – – 1,000 43,743
Expected period to enter into the
determination of profit or loss:
  amortisation of forward
points in 2023 1,240 47 7 – – 113 1,407
  amortisation of forward
points in 2024 – 28 – – – 2 30
  amortisation of forward
points in 2025 – – – – – – –
Total amortisation
of forward points 1,240 75 7 – – 115 1,437
Amounts recognised in OCI
during the period:
  for amortisation of forward
points/currency basis spread 3,696 287 108 11 27 267 4,396
  for adjustment of net
interest on swap – 36 – – 837 22 895
  for changes in fair value
of the forward contracts/
swaps 10,175 1,184 (40) (2) (551) (174) 10,592
  for recycling of FX result
of foreign currency loans (10,612) (1,550) (157) (9) (504) (47) (12,879)
Total amounts recognised
in OCI during the period 3,259 (43) (89) – (191) 68 3,004
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38. Maturity analysis of assets and liabilities
The table below shows an analysis of assets and liabilities according to when they are expected to be
recovered or settled. Loans and advances to customers are based on the same expected repayment behaviour
as used for estimating the EIR. Debt issued and other borrowed funds reflect the contractual repayments
except for debts, where no waivers have been received against breached covenants at the balance sheet date.
Those borrowings are presented on demand.
As at 31 December 2023
Within
12 months
USD’000
After
12 months
USD’000
Total
USD’000
Assets
Cash at bank and in hand 76,429 – 76,429
Loans and advances to customers 329,765 392 330,157
Due from banks 9,819 32,278 42,097
Equity investment at FVOCI – 273 273
Property and equipment – 7,237 7,237
ROU assets 808 3,977 4,785
Deferred tax assets – 5,769 5,769
Derivative assets 2,450 – 2,450
Other assets 11,901 1,589 13,490
Intangible assets – 7,340 7,340
Total assets 431,172 58,855 490,027
Liabilities
Debt issued and other borrowed funds 158,086 115,325 273,411
Due to customers 79,087 8 79,095
Retirement benefit liability 22 4,816 4,838
Current tax liability 9,326 – 9,326
Deferred tax liability – 2,406 2,406
Lease liability 652 2,620 3,272
Derivative liabilities 69 9 78
Other liabilities 15,584 23,979 39,563
Provisions 1,428 – 1,428
Total liabilities 264,254 149,163 413,417
Net 166,918 (90,308) 76,610
37. Hedge accounting continued
As at 31 December 2023
Changes in fair value of hedging instruments
Effective
portion:
recognised in
OCI
USD’000
Hedge
ineffectiveness:
recognised
in income
statement
USD’000
Total
USD’000
Cash flow hedge
Forward contracts (1,735) – (1,735)
Cross-currency interest rate swaps 66 – 66
(1,669) – (1,669)
As at 31 December 2022
Changes in fair value of hedging instruments
Effective
portion:
recognised in
OCI
USD’000
Hedge
ineffectiveness:
recognised
in income
statement
USD’000
Total
USD’000
Cash flow hedge
Forward contracts 3,161 – 3,161
Cross-currency interest rate swaps (157) – (157)
3,004 – 3,004
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38. Maturity analysis of assets and liabilities continued
As at 31 December 2022
Within
12 months
USD’000
After
12 months
USD’000
Total
USD’000
Assets
Cash at bank and in hand 83,117 – 83,117
Loans and advances to customers 331,301 597 331,898
Due from banks 16,613 22,287 38,900
Equity investment at FVOCI – 244 244
Property and equipment – 3,513 3,513
ROU assets 832 3,757 4,589
Deferred tax assets – 4,625 4,625
Derivative assets 7,131 724 7,855
Other assets 9,621 349 9,970
Intangible assets – 5,041 5,041
Total assets 448,615 41,137 489,752
Liabilities
Debt issued and other borrowed funds 171,172 90,129 261,301
Due to customers 84,146 9 84,155
Retirement benefit liability – 4,593 4,593
Current tax liability 8,873 – 8,873
Deferred tax liability 7 2,177 2,184
Lease liability 982 2,109 3,091
Derivative liabilities 456 – 456
Other liabilities 10,323 24,077 34,400
Provisions 967 71 1,038
Total liabilities 276,926 123,165 400,091
Net 171,689 (82,028) 89,661
39. Earnings per share
Basic Earnings Per Share (‘EPS’) is calculated by dividing the net profit for the year attributable to ordinary
equity holders of the Company by the weighted average number of ordinary shares outstanding during the
year.
There are no share options which will have a dilutive effect on EPS. Therefore, the Company does not have
dilutive potential ordinary shares, and diluted earnings per share calculation is not applicable.
The following table shows the income and share data used in the basic and diluted EPS calculations:
2023
USD’000
2022
USD’000
Net profit attributable to ordinary equity holders of the parent 9,206 17,892
Weighted average number of ordinary shares for basic earnings per share 100,000,000 100,000,000
USD USD
Earnings per share
Equity shareholders of the parent for the year:
Basic earnings per share 0.09 0.18
Diluted earnings per share 0.09 0.18
The Company has applied the number of shares issued by ASA International Group plc as at 31 December
2023 and 31 December 2022. There have been no transactions involving ordinary shares or potential ordinary
shares between the reporting date and the date of the completion of financial statements which would
require the restatement of EPS. No dividend is declared for the year 2023 (2022: nil).
The following table shows the dividend per share:
2023
USD’000
2022
USD’000
Dividend per share n/a n/a
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2023
USD’000
2022
USD’000
Dividend income 4,670 31,064
Net revenue 4,670 31,064
Personnel expenses 40. (1,212) (1,192)
Professional fees (2,446) (1,936)
Administrative expenses (1,144) (976)
Exchange rate differences (45) (101)
Total operating expenses (4,847) (4,205)
Profit before tax (177) 26,859
Profit/total comprehensive profit for the period, net of tax (177) 26,859
The notes 40 to 47 form an integral part of these financial statements .
Notes
2023
USD’000
2022
USD’000
Assets
Cash at bank and in hand 359 778
Due from banks 14.1. 21,392 20,692
Investment in subsidiaries 41. 120,684 120,684
Other assets 42. 898 225
Total assets 143,333 142,379
Equity and liabilities
Equity
Issued capital 43. 1,310 1,310
Retained earnings 44. 119,461 119,638
Other reserves 71 –
Total equity attributable to equity holders of the parent 120,842 120,948
Liabilities
Other liabilities 45. 22,491 21,431
Total liabilities 22,491 21,431
Total equity and liabilities 143,333 142,379
Approved by the Board of Directors on 26 April 2024
Signed on behalf of the Board
Karin Kersten Tanwir Rahman
CEO CFO
The notes 40 to 47 form an integral part of these financial statements.
Financial Statements continued
Statutory statement of profit and loss
and other comprehensive income
for the year ended 31 December 2023
Statutory statement of financial position
as at 31 December 2023
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Financial Statements continued
Statutory statement of changes in equity
for the year ended 31 December 2023
Issued
capital
USD’000
Retained
earnings
USD’000
Other
reserves
USD’000
Total
USD’000
At 1 January 2022 1,310 92,779 – 94,089
Profit for the period – 26,859 – 26,859
Total comprehensive loss for the period 1,310 119,638 – 120,948
Dividend – – –
At 31 December 2022 1,310 119,638 – 120,948
At 1 January 2023 1,310 119,638 – 120,948
Profit for the period – (177) – (177)
Total comprehensive loss for the period 1,310 119,461 – 120,771
Share-based payments – – 71 71
At 31 December 2023 1,310 119,461 71 120,842
The notes 40 to 47 form an integral part of these financial statements .
Notes
2023
USD’000
2022
USD’000
(Restated)
Operating activities
Profit before tax (177) 26,859
Adjustment for movement in:
Operating assets 46. (1,373) 313
Operating liabilities 46. 1,060 (3,571)
Non-cash items 71 –
Net cash flows used in operating activities (419) 23,601
Financing activities
Loan (repaid)/received – (23,206)
Net cash flows used in financing activities – (23,206)
Net increase in cash and cash equivalents (419) 395
Cash and cash equivalents at the beginning of the period 778 383
Cash and cash equivalents as at 31 December 359 778
The notes 40 to 47 form an integral part of these financial statements.
Statutory statement of cash flows
for the year ended 31 December 2023
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Financial Statements
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Financial Statements
Strategic Report
Separate financial statements
The accounting policies applied in the statutory financial statements are similar to those used in the
consolidated financial statements except for investments in subsidiaries. Investments in subsidiaries are
accounted in the separate financial statements, using the cost method.
At each reporting date it is determined whether there is objective evidence that the investment in the
subsidiaries is impaired. If there is such evidence, a calculation will be made for the impairment amount
as the difference between the recoverable amount of the subsidiaries and its carrying value.
40. Total other operating expenses
2023
USD’000
2022
USD’000
Total operating expenses include the following items:
Personnel expenses (1,212) (1,192)
Professional fees (2,446) (1,936)
Administrative expenses (1,144) (976)
(4,802) (4,104)
41. Investments in subsidiaries
2023
USD’000
2022
USD’000
Investments in subsidiaries
ASA International Holding 75,195 75,195
ASA International NV 45,489 45,489
120,684 120,684
Name of company Country Nature of business 2023 ownership 2022 ownership
ASA International Holding Mauritius MFI Holding Company 100% 100%
ASA International NV Netherlands MFI Holding Company 100% 100%
42. Other assets
2023
USD’000
2022
USD’000
The other assets comprised the following:
Other receivables 863 145
Advances and prepayments 35 80
898 225
43. Issued capital
100 million ordinary shares of GBP 0.01 each. No movement occurred during 2023 and 2022.
44. Retained earnings
Total retained earnings are calculated as follows:
2023
USD’000
2022
USD’000
Balance at the beginning of the period 119,638 92,779
Result for the period (177) 26,859
Balance at the end of the period 119,461 119,638
Profit for the period
Attributable to equity holders of the parent (177) 26,859
Financial Statements continued
Notes to the statutory financial statements
for the year ended 31 December 2023
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Financial Statements
Strategic Report
Financial Statements continued
Notes to the statutory financial statement continued
for the year ended 31 December 2023
45. Other liabilities
Notes
2023
USD’000
2022
USD’000
Short-term liabilities
Accrued audit fees 628 563
Accrued cost 113 176
Other intercompany payables 358 –
1,099 739
Long-term liabilities
Escrow liability to CMI 14.1. 21,392 20,692
21,392 20,692
22,491 21,431
46. Additional cash flow information
2023
USD’000
2022
USD’000
Changes in operating assets
Due from banks (700) (227)
Other assets (673) 540
(1,373) 313
Changes in operating liabilities
Other liabilities 1,060 (3,571)
1,060 (3,571)
Changes in non-cash items
Share-based payments 71 –
71 –
47. Maturity analysis of assets and liabilities
The table below shows an analysis of assets and liabilities according to when they are expected to be
recovered or settled.
As at 31 December 2023
Within
12 months
USD’000
After
12 months
USD’000
Total
USD’000
Assets
Cash at bank and in hand 359 - 359
Due from banks - 21,392 21,392
Investment in subsidiaries - 120,684 120,684
Other assets 898 - 898
1,257 142,076 143,333
Liabilities
Other liabilities 1,099 21,392 22,491
Net 158 120,684 120,842
As at 31 December 2022
Within
12 months
USD’000
After
12 months
USD’000
Total
USD’000
Assets
Cash at bank and in hand 778 – 778
Due from banks – 20,692 20,692
Investment in subsidiaries – 120,684 120,684
Other assets 225 – 225
1,003 141,376 142,379
Liabilities
Other liabilities 739 20,692 21,431
Net 264 120,684 120,948
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Additional Information
KPI 2023 2022 Definition
Outstanding
loan portfolio
(‘OLP’)
$369.2m
$351.2m The figure depicts the consolidated outstanding loan portfolio, including off-book
net BC loan portfolio from IDFC, Jana Small Finance Bank and Fincare and Direct
Assignment loans with SBI. It excludes interest receivables and unamortised loan
processing fees, as included in the loans and advances to customers in note 13
to the financial statements, and maintains the deduction of modification losses
and ECL provisions from the gross outstanding loan portfolio.
Gender
diversity
37%
35% Number of female employees compared to total employees.
Gross OLP/
Client
$162
$160 Gross outstanding loan portfolio including BC and DA loans divided by total
number of clients.
Debt-to-
equity ratio
3.5
2.9 The ratio is calculated by dividing closing balances of interest-bearing debt with
total equity. Interest-bearing debt includes debt issued and other borrowed funds
in note 25, less interest payables.
Profit
before tax
$32.2m
$46.3m Consolidated profit before tax for the year as reported in the financial statement.
Reported net
profit after
tax
$8.8m
$17.9m Consolidated profit for the year as reported in the financial statements.
Net interest
margin
(‘NIM’)
31%
28% Net interest margin (‘NIM’) is calculated as net interest income divided by average
interest-earning assets on consolidated basis. Average interest-earning assets
is calculated as the sum of cash at bank and in hand, due from banks and loans
and advances from customers.
Return on
assets (‘ROA’)
1.8%
3.4% Return on assets (‘ROA’) is calculated by dividing the net profit after tax
by the average of total assets. ROA is displayed as a percentage.
Return on
equity (‘ROE’)
10.5%
18.5% Return on equity (‘ROE’) is calculated by dividing the net profit after tax
by the average of shareholders’ equity. ROE is displayed as a percentage.
EPS (USD) 0.09
0.18 Earnings per share (‘EPS’) is calculated by dividing the Company’s net profit
after tax by the weighted average number of ASAI Group plc ordinary shares
outstanding during the year. For 2022, number of shares is equivalent to the
number of ASA International Group plc shares, which was 100 million.
Dividend per
share (‘DPS’)
(US cents)
NIL
NIL The figure is calculated by dividing the total dividends paid out by ASAI, including
interim dividends, over a period of time by the weighted average number of ASAI
Group plc ordinary shares outstanding during the year.
Cost to
income
72.1%
67. 5% Cost to income ratio is calculated by dividing total operating expenses by total
net operating income on consolidated basis.
% Voluntary
savings to
OLP
3.4%
4.3% Voluntary savings to OLP is calculated by dividing total voluntary savings by total
outstanding loan portfolio including BC and DA loans.
KPI 2023 2022 Definition
Taxes 23.4m
28.4m Sum of the consolidated income tax expense and consolidated withholding tax
expense for the year as reported in the financial statement.
Client
economic
yield (‘CEY’)
NIL
5.3% The Client Economic Yield (‘CEY’) is calculated by deducting the clients’
weekly interest costs from their average weekly income, derived from their
business activities.
Client
retention rate
75%
72% Determined by subtracting the total number of new clients in a period from
the number of clients at the end of that period divided by the total number
of clients at the beginning of the period. Periods based on tenor of client loans
(6, 10, or 12 months).
Number of
new branches
77
112 The number of new branches commencing operations in the period in all
operating markets.
Client
satisfaction
survey
90%
93% This survey is conducted by interviewing at least two clients per loan officer
(long-term and newer clients with loans of greater than 6/12 months as
applicable) with yes/no, closed and open-ended questions. The responses are
coded and converted into percentages to estimate client’s satisfaction with
the products and with the services delivered by ASAI.
Carbon
footprint
8,574
tonnes
CO
2
7,392
tonnes
CO
2
Carbon footprint is measured as the sum of direct emissions of greenhouse gases,
carbon emissions from direct purchase of electricity and fuel combustion for
transportation purposes.
Social
performance
index (‘SPI‘)
90%
92% SPI4 is a social audit tool made by CERISE as per Universal Standards managed by
SMART CAMPAIGN. The assessment is divided into seven dimensions with both
qualitative and quantitative questions. Each dimension carries a score of 100.
See https://en.spi-online.org/ for more details.
Number
of clients
2.3m
2.3m The number of clients in all operating markets.
Number
of branches
2,016
2,028 The number of branches in all operating markets.
PAR>30 2.1%
5.9% PAR>30 is the percentage of gross on-book OLP that have one or more instalment
repayments of principal past due for more than 30 days, but less than 365 days,
divided by total outstanding on-book gross loan portfolio.
Number
of staff
13,433
13,602 The number of people directly employed by the Company. Under this definition,
we use colleagues, staff and employees interchangebly in the annual report.
Client per
branch
1,156
1,134 Client per branch is the total number of clients divided by the total number
of branches.
Borrowers
per loan
officer
287
272 The borrowers per loan officer is calculated by dividing total number of clients
by total number of loan officers.
Employee
recruitment
33%
30% Number of staff hired in current period/number of staff at start of current period.
Additional Information
Alternative performance measures
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KPI 2023 2022 Definition
Employee
satisfaction
rate
81%
86% Using qualitative methods, staff satisfaction analyses employee satisfaction rate
along three main areas: professional satisfaction, facility satisfaction and
department service satisfaction.
Hours
training
67,107
61,312 Total hours of in-house, online and external training at the entity level, excluding
on-the-job training.
Clients
accessing
a financial
service for
the first time
70%
NIL This outcome indicator was derived from clients’ responses to question “Are you
accessing a formal financial service, for the first time, through taking ASAI loan?
(Formal means a financial institution) – Yes/No” in the Client Economic Yield
survey, reflecting their interpretation and input.
Clients
increasing
their daily
income level
94%
NIL This outcome indicator was derived from clients’ responses to question “Has your
daily income increased after taking the loan? – Increased/No Change/Decreased”
in the Client Economic Yield survey, reflecting their interpretation and input.
Increase
of share in
family income
by females
89%
NIL This outcome indicator was derived from clients’ responses to question “Has your
share in family income increased after taking the loan? – Increased/No Change/
Decreased” in the Client Economic Yield survey, reflecting their interpretation
and input.
Financial
management
improved
94%
NIL This outcome indicator was derived from clients’ responses to question “Has your
understanding of managing finances improved since you took loan from the
company? – Improved/No/Worsen” in the Client Economic Yield survey,
reflecting their interpretation and input.
Living
conditions
improved
94%
NIL This outcome indicator was derived from clients’ responses to question “Has your
living conditions improved after taking the loan? – Improved/No/Worsen” in the
Client Economic Yield survey, reflecting their interpretation and input.
Increase of
leadership
or decision-
making role
82%
NIL This outcome indicator was derived from clients’ responses to question “Has your
leadership or decision-making role within your household or community increased
after taking the loan? – Improved/No/Worsen” in the Client Economic Yield
survey, reflecting their interpretation and input.
Additional Information continued
Alternative performance measures continued
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Abbreviation Definition
2FA Two-factor authentication
A1 Nigeria A1 Nigeria Consultancy Limited
Admission Admission of the Company to the Main Market of the London Stock Exchange
AGM Annual General Meeting
ALCO Asset-Liability Committee
AMBS ASA Microfinance Banking System
AML Anti-Money Laundering
AMSL ASAI Management Services Limited
ARC Audit and Risk Committee
ASA NGO Bangladesh ASA NGO-MFI registered in Bangladesh
ASA Kenya ASA Limited
ASA Lanka ASA Lanka Private Limited
ASA Myanmar ASA Microfinance (Myanmar) Ltd
ASA Model The ASA model of microfinance as developed by ASA NGO Bangladesh
ASA Pakistan ASA Pakistan Limited
ASA Rwanda ASA Microfinance (Rwanda) Limited
ASA Savings & Loans ASA Savings & Loans Limited (Ghana)
ASA Sierra Leone ASA Microfinance (Sierra Leone)
ASA Tanzania ASA Microfinance (Tanzania) Ltd
ASA Uganda ASA Microfinance (Uganda) Limited
ASA Zambia ASA Microfinance Zambia Limited
ASAIH ASA International Holding
ASAI I&M ASAI Investments & Management B.V.
ASA India ASA International India Microfinance Limited
ASAI NV ASA International N.V.
ASA International ASA International Group plc
ASA Nigeria ASHA Microfinance Bank Limited
ASIEA Association for Social Improvement and Economic Advancement (Nigeria)
BC Business Correspondent
Abbreviation Definition
BEPS Base Erosion and Profit Shifting
BIO Belgian Investment Company for Developing Countries SA/NV
Board Board of Directors of ASA International Group plc
CBS Core Banking System
Citi CITIBANK, N.A., JERSEY BRANCH
CBN Central Bank of Nigeria
CCRC Client Complaint Resolution Committee
CEO Chief Executive Officer
CFO Chief Financial Officer
CGU Cash-generating unit
COO Chief Operating Officer
Companies Act/CA Companies Act 2006 (UK)
Company ASA International Group plc
CMI Catalyst Microfinance Investors
CMI Lanka C.M.I. Lanka Holding (Private) Limited
CMIC Catalyst Microfinance Investment Company
CMII CMI International Holding
CO
2
Carbon dioxide
The Code UK Corporate Governance Code 2016 published by the Financial Reporting Council
COB Commencement of Business
COC Change of control
CODM Chief Operating Decision Maker
CPI Consumer Price Index
CPP Client Protection Principles
CRRO Climate-Related Risks and Opportunities
CSR Corporate Social Responsibility
DA Direct Assignment
DCF Discounted cash flow
DCP Digital Credit Provider
Additional Information continued
List of abbreviations
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Abbreviation Definition
IFRS International Financial Reporting Standards
INED Independent Non-Executive Director
IR Investor Relations
IDFC IDFC First Bank
IRD Department of Inland Revenue
ISDA International Swaps and Derivatives Association
IT Information Technology
JSFB Jana Small Finance Bank
KPI Key Performance Indicator
KYC Know Your Customer
Lak Jaya Lak Jaya Micro Finance Limited (Sri Lanka)
LCBU Loan Collateral Build Up
Listing Rules The listing rules relating to admission to the Official List made under section 73A(2)
of the FSMA
LO Loan officer
LTIP Long-term incentive plan
MBA Philippines PagASA Ng Pinoy Mutual Benefit Association, Inc.
MFB Microfinance Banking
MFI Microfinance Institution
MRR Minimum Retention Rate
NCI Non-controlling interest
NCIA Natural Calamity Impact Assessment
NBFC-MFI Non-Banking Financial Company – Micro Finance Institutions
Non-Executive Directors The Non-Executive Directors of ASA International
NRCGT Non–Resident Capital Gains Tax
OeEB Oesterreichische Entwicklungsbank Ag
OeCD Organisation for Economic Co-operation and Development
Oikocredit Oikocredit, Ecumenical Development Co-Operative Society U.A.
OCI Other Comprehensive Income
Pagasa Pagasa ng Masang Pinoy Microfinance, Inc.
Abbreviation Definition
DEI Diversity, Equity and Inclusion
DFS Digital Financial Services
DFS app Digital Financial Services platform
DR Disaster Recovery
DRF/MRF Death Risk Fund/Multipurpose Risk Fund
EBT Employee Benefit Trust or Earnings Before Tax
ECL Expected Credit Losses
ED Executive Director
EIR Effective Interest Rate
EPRP Emergency Preparedness and Response Plan
ESG Environmental Social and Governance
ESMS Environment and Social Management System
EXCO Executive Committee
EY Ernst & Young LLP is a limited liability partnership registered in England and Wales with
registered number OC300001 and is a member firm of Ernst & Young Global Limited
FCA Financial Conduct Authority
FMPU Fraud and Misappropriation Unit
FTE Full-Time Employee
FVOCI Fair Value through Other Comprehensive Income
FVTPL Fair Value Through Profit or Loss
FX Foreign Exchange
GBP Pound Sterling
GHG Greenhouse Gas
GMC Grievance Mitigation Committee
Group ASA International and its consolidated subsidiaries and subsidiary undertakings from
time to time
HR Human Resources
IAS International Accounting Standards
IASB International Accounting Standards Board
IBR Incremental Borrowing Rate
Additional Information continued
List of abbreviations continued
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Abbreviation Definition
UK The United Kingdom of Great Britain and Northern Ireland
UKLA United Kingdom Listing Authority
US or United States The United States of America, its territories and possessions, any State of the United
States of America, and the District of Columbia
USD United States Dollar
Abbreviation Definition
Pagasa Consultancy Pagasa Consultancy Limited
Pagasa Philippines/PPFC Pagasa Philippines Finance Corporation, Inc.
PDMRs Persons Discharging Managerial Responsibilities
PD Probability of Default
Pinoy Pinoy Consultancy Limited
PSO Pre-Service Orientation
PT PAGASA Consultancy PT PAGASA Consultancy
RBI Reserve Bank of India
RMF Risk Management Framework
Relationship Agreement
The relationship agreement entered into by ASA International, Catalyst
Microfinance Investors, Catalyst Continuity Limited, Dirk Brouwer and Md Shafiqual
Haque Choudhury
RFRs Risk free rates
ROU Right-of-use
SAAS Software as a service
SBI State Bank of India
SBP State Bank of Pakistan
SC Sustainability Committee
SDG Sustainable Development Goals
SEC Securities and Exchange Commission
SECR Streamlined Energy Carbon Reporting
Sequoia Sequoia B.V.
SMART targets Specific, Measurable, Achievable, Relevant, and Time-Bound targets
SME loans Small-Medium Enterprise loans
SMP Supplier Market Place
SPPI Solely Payments of Principal and Interest
SPM Social Performance Management
Symbiotics Symbiotics SA
TCFD Task Force on Climate-Related Financial Disclosures
ToR Terms of Reference
Additional Information continued
List of abbreviations continued
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www.asa-international.com
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt as to the action you should take, you should consult an appropriate independent financial adviser authorised
under the Financial Services and Markets Act 2000. All Shareholders should consult their professional advisers regarding their own tax
position.
If you have sold or otherwise transferred all your Ordinary Shares in ASA International Group plc, you should forward this document
and the accompanying form of proxy to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale
or transfer was effected for transmission to the purchaser or transferee.
The Form of Proxy accompanying this document for use in connection with the 2024 AGM should be completed and returned in
accordance with the instructions thereon so as to be received by the Company’s Registrars, Equiniti by hand or by post at Equiniti,
Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA by no later than 11:00 [a.m.] on 18 June 2024.
You may request a hard copy of this document and for information incorporated into this document by reference to another source
by contacting Equiniti on 0371 384 2030 if calling from within the United Kingdom. If calling from outside the UK, please ensure the
country code (+44) is used before the number. You may also request that all future documents, announcements and information to be
sent to you in relation to the Notice of AGM should be in hard copy form.
ASA INTERNATIONAL GROUP PLC
(incorporated and registered in England and Wales under number 11361159)
LETTER FROM THE CHAIRMAN AND NOTICE OF ANNUAL GENERAL MEETING
TO BE HELD ON THURSDAY 20 JUNE 2024
AND
EXPLANATORY CIRCULAR TO SHAREHOLDERS IN CONNECTION WITH A PROPOSED
APPROVAL OF WAIVER OF OBLIGATIONS UNDER RULE 9 OF THE TAKEOVER CODE
Keefe, Bruyette & Woods (acting through Stifel Nicolaus Europe Limited) which is authorised and regulated by the Financial Conduct
Authority in the UK, is acting exclusively for the Company, through its Independent Directors, and no one else in connection with the
Waivers and will not be responsible to any person other than the Company, for providing the protections afforded to its clients, nor for
providing advice in relation to the Waivers or in relation to the contents of this document or any transaction or arrangement referred
to in this document.
The distribution of this document and/or the accompanying Form of Proxy in certain jurisdictions other than the UK may be restricted
by law and therefore persons into whose possession this document and/or the accompanying Form of Proxy comes should inform
themselves about and observe such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities
laws of any such jurisdiction.
A copy of this document, together with all information incorporated into this document by reference to another source, will be made
available on the Company’s website at www.asa-international.com by no later than 12 [noon] (London time) on [business day after date
of publication to be inserted]. For the avoidance of doubt, the contents of this website are not incorporated into and do not form part
of this document.
NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
ASA INTERNATIONAL GROUP PLC
(incorporated and registered in England and Wales under number 11361159)
NOTICE OF THE ANNUAL GENERAL MEETING of the Company, to be held as a “hybrid” meeting (held by combined physical and
electronic means) both online and [at the offices of Cavendish, One Bartholomew Close, London, EC1A 7BL] on 20 June 2024 at
11.00 [am] is set out at the end of this document.
CONTENTS PAGE
Part [I] Letter from the Chairman (including an explanation of the resolutions proposed) [1]
Part [II] Explanatory Notes [3]
Part [III] Directors Seeking Election of Re-Election [7]
Part [IV] Notice of Annual General Meeting [9]
Part [V] Explanatory Circular to Shareholders in Connection with a Proposed Approval of
Waiver of Obligations under Rule 9 of the Takeover Code [15]
Part [VI] Information on the Concert Party [17]
Part [VII] Financial and Ratings Information relating to Company [19]
Part [VIII] Additional Information [20]
Part [IX] Definitions [28]
1
NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
ASA INTERNATIONAL GROUP PLC
Registered Office
Highdown House
Yeoman Way
Worthing
West Sussex
United Kingdom
BN99 3HH
Registered in England and Wales Company No. 11361159
[Date] 2024
Dear Shareholder
I am pleased to enclose the Notice of the Annual General Meeting (“the Meeting”) of ASA International Group plc (the “Company”) to be
held at [the offices of [Cavendish, One Bartholomew Close, London, EC1A 7BL] at 11.00[am] on Thursday 20 June 2024. It will also be
possible to participate online. The formal Notice of the Meeting is set out on pages [7 to 8] of this document. Details of how to attend
the Meeting either online or in person can be found later in this Notice.
To ensure that the voting preferences of all shareholders may be taken into account, the Company will conduct a poll vote on all
resolutions put to the Meeting. If you would like to vote on the resolutions being put to the Meeting, please complete the Form of Proxy
sent with this Notice and return it to the Company’s Registrar, Equiniti, Aspect House, Spencer Road, Lancing, West Sussex, United
Kingdom BN99 6DA as soon as possible.
If your shares are held by a nominee service rather than in your own name, you should contact the provider of that service (in good time
before the meeting) about the process for appointing a proxy.
To be valid, the Form of Proxy or online voting instruction must be received by the Company’s Registrar, Equiniti, no later than
11.00[am] on Tuesday 18 June 2024. CREST members may choose to use the CREST electronic proxy appointment service in
accordance with the procedures set out on pages [9 and 10].
The results of the poll will be released to the market and published on the Company’s website as soon as practicable after the conclusion
of the Meeting.
An explanation of the business to be conducted at this year’s Meeting is set out in Part [II] of this document.
BUYBACK AUTHORITY, LTIP AWARDS AND RULE 9 OF THE TAKEOVER CODE
In addition to the ordinary business to be conducted at the Meeting, the Board also considers it appropriate to take certain additional
corporate actions in connection with Rule 9 of the City Code on Takeovers and Mergers (the “Takeover Code”). Please find enclosed,
in Parts V to VIII of this document, an explanatory circular giving further detail on this proposal, together with an explanatory note set
out below.
BACKGROUND
The Takeover Code applies to the Company. Under Rule 9 of the Takeover Code, any person who acquires an interest in shares (as
defined in the Takeover Code) which, taken together with any interest in shares already held by that person or any interest in shares held
or acquired by persons acting in concert with them, carry 30 per cent. or more of the voting rights of a company which is subject to the
Takeover Code, is normally required to make an offer to all the remaining shareholders to acquire their shares in the company. Under
Rule 37.1 of the Takeover Code, when a company redeems or purchases its own voting shares, any resulting increase in the percentage
of shares carrying voting rights in which a shareholder and any persons acting in concert with them are interested will normally be
treated as an acquisition for the purpose of Rule 9 of the Takeover Code.
Certain shareholders in the Company are taken to constitute a “concert party” for the purposes of the Takeover Code. The Company
has agreed with the Panel that those shareholders are Dirk Brouwer and the entities through which he indirectly holds his interests in
the Company, including Catalyst Microfinance Investors (“CMI”) and Catalyst Continuity Ltd. (“Continuity”) (CMI and Continuity are
ultimately controlled by Dirk Brouwer through CMIMC) (the “Concert Party”). As at the Latest Practicable Date, members of the
Concert Party are interested in 47,303,463 Shares, representing 47.3 per cent. of the voting share capital of the Company.
In common with many listed companies, the Directors have in recent years included a resolution in the notice of annual general meeting
of the Company to give limited authority for the Company to make market purchases of the Shares. The Board considers that it is
appropriate for the Company to be in a position to buy back Shares in the coming year if it is in the best economic interests of the
Company and its shareholders to do so. Accordingly, the Directors are seeking approval of a market-standard authority to buy back
Shares, as set out in Resolution 16 of the Notice of AGM (the “Buyback Authority”).
Separately, the Remuneration Committee has granted certain options under the LTIP (the “LTIP Awards”) to Dirk Brouwer in connection
with his employment as Chief Executive Officer of the Company. The maximum fair value of an LTIP Award (as used for accounting
PART I – LETTER FROM THE CHAIRMAN
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NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
LETTER FROM THE CHAIRMAN CONTINUED
purposes) that could have been granted to Dirk Brouwer in any one financial year was 100% of his basic salary. LTIP Awards will vest
over a three to five year period, and it is not expected that any LTIP Awards will be capable of exercise by Dirk Brouwer prior to
28 October 2025. Further detail is set out in the Company’s shareholder approved directors’ remuneration policy, as described in
the Annual Report. No further LTIP Awards will be granted to Dirk Brouwer following his appointment to his new role at the AGM
as (i) Deputy Chairman of the Board and (ii) Special Adviser to the new CEO, the Executive Committee and the broader management
team of the Company.
PROPOSED RESOLUTIONS
As described in further detail in Part V of this document, execution of the Buyback Authority and/or exercise of the LTIP Awards could,
absent the approvals sought at the 2023 AGM, require members of the Concert Party to make a mandatory offer for the remainder of
the share capital of the Company under Rule 9 of the Takeover Code due to the resulting increase in the interests of the Concert Party
arising from the execution of the Buyback Authority and/or exercise of the LTIP Awards.
The Independent Directors, being all of the Directors of the Company, with the exception of Dirk Brouwer (a member of the Concert
Party), are therefore asking the Independent Shareholders to approve the terms of the following waivers of these requirements, which
the Panel has agreed to grant to the members of the Concert Party following approval by the Independent Shareholders:
Resolution 18 (The Buyback Waiver) – being a waiver of the requirement for members of the Concert Party to make a mandatory offer
for the remainder of the share capital of the Company under Rule 9 of the Takeover Code as a result of a buyback conducted pursuant
to the Buyback Authority. If approved, the Buyback Waiver would only apply for as long as the Buyback Authority remains in force.
Any renewal of the Buyback Waiver would again be subject to Independent Shareholder approval at a meeting of Shareholders; and
Resolution 19 (The LTIP Waiver) – being a waiver of the requirement for members of the Concert Party to make a mandatory offer for
the remainder of the share capital of the Company under Rule 9 of the Takeover Code as a result of the exercise of rights to Shares
under the LTIP. If approved, the LTIP Waiver would only apply to LTIP Awards granted to Dirk Brouwer in connection with his role as
Chief Executive Officer of the Company (and apply up to the maximum amount of Shares as set out in the LTIP Waiver Resolution).
Any other awards granted and exercised under the LTIP to members of the Concert Party would be subject to Independent Shareholder
approval at a further meeting of Shareholders, together the Buyback Waiver and the LTIP Waiver constituting, the “Waivers”.
Passing of the Waivers would give the Company flexibility to buy back its Shares and permit the exercise of LTIP Awards without
members of the Concert Party being obliged to make a general offer for the Company.
RECOMMENDATION
The Independent Directors, who have been so advised by Stifel in connection with the potential buyback of Shares and exercise of LTIP
Awards (including in respect of the implications on the Independent Shareholders of any controlling position that such buyback of Shares
or exercise of LTIP Awards may create and the effect on shareholders generally of any buyback of Shares conducted in accordance with
the Buyback Authority or exercise of LTIP Awards), believe that obtaining the Waivers is fair and reasonable and is in the best interests
of the Independent Shareholders and the Company as a whole. In providing advice to the Independent Directors, Stifel has taken into
account the Independent Directors’ commercial assessments.
Stifel confirms that it, and any person who is or is presumed to be acting in concert with it, is independent of the members of the
Concert Party and has no personal, financial or commercial relationship, or arrangements or understandings with the members of the
Concert Party. Stifel has given and has not withdrawn its written consent to the inclusion in this document of its name and the
references to it in the form and context in which they are included.
Accordingly, the Independent Directors recommend that Independent Shareholders vote in favour of the Waiver Resolutions to approve
the Waivers (Independent Directors do not own Shares in the Company).
Dirk Brouwer has not taken part in the decision to recommend the Waiver Resolutions. The members of the Concert Party and/or their
nominees or representatives will not vote on the Waiver Resolutions at the 2023 AGM. Further details on the Waiver Resolutions are
set out in Part II below.
Thank you for your continued support.
Yours faithfully
GUY DAWSON
CHAIRMAN
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NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
PART II – EXPLANATORY NOTES
The following pages give an explanation of the resolutions proposed at the Meeting.
Resolutions 1 to 13 (inclusive) and 18 and 19 are proposed as ordinary resolutions. For each of those resolutions to be passed, more
than half of the votes cast must be in favour of the resolution.
Resolutions 14 to 17 (inclusive) are proposed as special resolutions. For each of those resolutions to be passed, at least three-quarters
of the votes cast must be in favour of the resolution.
ORDINARY RESOLUTIONS
RESOLUTION 1: 2023 ANNUAL REPORT AND FINANCIAL STATEMENTS
The Companies Act 2006 requires the Directors of a public company to lay before the Company in a general meeting the annual report
and accounts of the Company for each financial year. The Directors ask that shareholders receive the Company’s Annual Report and
Financial Statements for the financial year ended 31 December 2023 (the [‘]Annual Report and Financial Statements[’]), including the
reports of the Directors and the Auditor.
RESOLUTION 2: ANNUAL REPORT ON REMUNERATION
The Annual Report on Remuneration, which includes a statement by Hanny Kemna, Chairman of the Remuneration Committee, is set
out on pages [=] and [=] of the Annual Report and Financial Statements. The Annual Report on Remuneration sets out payments made
during 2023 and explains how the Directors’ Remuneration Policy will be implemented in 2024.
The vote on the Annual Report on Remuneration under Resolution 2 is advisory only, and any entitlement of a Director to remuneration
is not conditional on this Resolution being passed.
The Company’s Auditors during the year, Ernst & Young LLP, have audited those parts of the Annual Report on Remuneration that are
required to be audited and their report may be found on pages [95 to 103] inclusive of the Annual Report and Financial Statements.
The Directors’ Remuneration Policy was approved by the shareholders at the 2023 Annual General Meeting and is therefore not
required to be submitted to the shareholders again until the 2026 annual general meeting.
RESOLUTIONS 3 TO 8: ELECTION OR RE-ELECTION OF DIRECTORS
The Company’s Articles of Association require all Directors to be subject to election by shareholders at the first annual general meeting
following their appointment and for re-election by shareholders at least once every three years.
The provisions of the UK Corporate Governance Code (the “Code”) state that all directors of FTSE 350 companies should be subject
to annual election by shareholders. In order to comply with this provision of the Code, all Directors in place as at the date of this Notice
will retire at the Meeting and the Board proposes all of them for election at the Meeting.
BIOGRAPHICAL DETAILS OF ALL DIRECTORS STANDING FOR ELECTION ARE SET OUT ON PAGES [5 AND 6] OF THIS
DOCUMENT.
The Company is also required to comply with provisions of the UK Listing Rules (the “Listing Rules”) relating to controlling shareholders
and the election and re-election of the independent Non-[e]xecutive Directors. For the purposes of the Listing Rules, Catalyst
Microfinance Investors is classed as a “controlling shareholder” of the Company as a result of exercising or controlling more than 30%
of the voting rights of the Company. Therefore, under rule 13.8.17 of the UK Listing Rules this AGM Notice is required to state certain
information concerning any independent Director proposed for election or re-election, and under rule 9.2.2E of the UK Listing Rules
such election or re-election must be approved by a majority vote of both: the independent shareholders (i.e. shareholders of the
Company, other than Catalyst Microfinance Investors, who are entitled to vote on the election of Directors); and the shareholders
as a whole.
In order to determine this, the Company will arrange for the number of votes cast by the independent shareholders to be counted
separately, and will announce the results of the voting on both bases. If a majority vote is not achieved on both bases, the Company may
under the UK Listing Rules put the matter to a second vote, this time a single vote of the shareholders as a whole at a general meeting,
to be held between 90 and 120 days after the AGM. Pending the second vote, the relevant Director or Directors will be deemed to have
been elected only for the period from the date of the AGM until the earlier of (a) the conclusion of any second vote, (b) the date 120
days after the AGM and (c) the date of any announcement by the Board that it does not intend to hold a second vote. If the independent
Director’s election is approved by a majority vote of all shareholders at the second general meeting, the Director will then be elected
until the next AGM.
None of the independent Non-[E]xecutive Directors seeking election at the Meeting has any existing or previous relationship with the
Company, nor with any controlling shareholder of the Company or any associate of a controlling shareholder of the Company within the
meaning of LR 13.8.17R(1).
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NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
The Board considers that the three Independent Non-Executive Directors and the Chairman, who are all standing for election, are
independent in character and judgement. In addition, the Board considers that each Director standing for election continues to make
an effective and valuable contribution and demonstrates commitment to the role. Accordingly, the Board unanimously recommends the
election of each of the Directors listed in Resolutions 3 to 8.
The Company’s Nomination Committee considers the appointment and replacement of Directors subject to the rules set out in the
Company’s Articles of Association. The Nomination Committee will normally engage an independent search consultant with no
connection to the Company to find appropriate candidates for the Board with the requisite skills, and in doing so will take account of
relevant guidelines and legislation relating to the appointment of individuals to boards. The Nomination Committee may also consider
candidates introduced to the Company from other sources.
RESOLUTION 9: RE-APPOINTMENT OF THE AUDITOR
UK company legislation requires that shareholders re-appoint the external auditor at each general meeting at which accounts are laid
before the Company, to hold office until the end of the next such meeting. Following a review of the work undertaken by Ernst & Young
LLP and on the recommendation of the Audit and Risk Committee, the Board is proposing to shareholders the re-appointment of Ernst
& Young LLP as the Company’s auditor, that firm having expressed their willingness to continue in office for a further year.
RESOLUTION 10: AUDITOR’S REMUNERATION
If authorised by shareholders, the Directors may set the remuneration payable to the external auditor, and Resolution 12 proposes
the renewal of the current authority to do so. The Board has delegated this authority to the Audit and Risk Committee. Details of the
remuneration paid to the external auditor during the financial year ended 31 December 2023 may be found in the Annual Report
and Financial Statements.
RESOLUTION 11: GENERAL AUTHORITY TO ALLOT SHARES
Resolution 11 seeks authority for the Board to allot, or grant rights to subscribe for or convert securities into, a limited number of shares
in the Company. Section 551 of the Companies Act 2006 requires such authority to be granted by the Company in a general meeting
so that any allotment of shares or grant of rights to subscribe for or convert securities into shares is not exercised at the sole discretion
of the Directors. The Resolution specifies the maximum nominal amount of shares which can be allotted or rights granted.
Guidance published by the Investment Association in 2016 states that its members will regard as routine an authority to allot up to
two-thirds of existing issued share capital, provided that any amount in excess of one-third of existing issued shares be applied to fully
pre-emptive rights issues only. The Board considers it appropriate to follow this guidance.
Part (a) of this Resolution therefore authorises the Directors to allot Ordinary Shares or grant rights to subscribe for or convert securities
into shares up to an aggregate nominal amount equal to £333,333.33 (representing 33,333,333 Ordinary Shares of 1 penny each).
This amount represents one-third of the issued Ordinary share capital (excluding treasury shares) of the Company.
Part (b) of this Resolution authorises the Directors to allot Ordinary Shares or grant rights to subscribe for or convert securities into
shares in connection with a rights issue in favour of Ordinary shareholders up to an aggregate nominal amount equal to £666,666.66,
less the nominal amount of any shares issued under part (a) of the Resolution. This amount represents approximately two-thirds of the
issued Ordinary share capital (excluding treasury shares) of the Company.
The figure used for the nominal amount of issued Ordinary share capital of the Company is based on the Ordinary share capital in issue
as at [X] May 2024. As at [X] May 2024, no Ordinary Shares are held by the Company in treasury.
THE DIRECTORS HAVE NO PRESENT INTENTION TO EXERCISE EITHER OF THE AUTHORITIES SOUGHT UNDER THIS
RESOLUTION BUT WOULD LIKE THE FLEXIBILITY TO DO SO IN APPROPRIATE CIRCUMSTANCES.
These authorities shall last until the conclusion of the Annual General Meeting of the Company to be held in 2025 or on 19 June 2025,
whichever is the sooner.
PART II – EXPLANATORY NOTES CONTINUED
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NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
SPECIAL RESOLUTIONS
RESOLUTIONS 12 AND 13: GENERAL DISAPPLICATION OF PRE-EMPTION RIGHTS AND SPECIFIC DISAPPLICATION OF PRE-
EMPTION RIGHTS IN CONNECTION WITH AN ACQUISITION OR SPECIFIED CAPITAL INVESTMENT
If a company proposes to allot Ordinary Shares or other [‘]equity securities[’] other than in connection with an employee share scheme
(including by way of sale of any shares which the Company has purchased and has elected to hold as treasury shares) wholly for cash, it
has a statutory obligation (subject to certain exemptions) to offer those shares to holders of similar shares in proportion to their existing
holdings. Resolutions 12 and 13 seek to disapply this statutory right of first refusal to a limited extent, so as to give the Directors the
power to allot Ordinary Shares (or sell any Ordinary Shares which the Company holds in treasury) for cash without first offering them
to existing shareholders in proportion to their existing shareholdings. The powers under Resolutions 12 and 13 shall last until the
conclusion of the Annual General Meeting of the Company to be held in 2025 or at the close of business on 19 September 2025,
whichever is the sooner.
Part (a) of Resolution 12 provides the Directors with flexibility to deal with practical issues such as fractional entitlements and securities
law restrictions in overseas jurisdictions when making an offer that is otherwise pre-emptive, and would apply to any allotment of shares
under Resolution 12. Part b) of Resolution 12 contains a broader general disapplication of pre-emption rights up to an aggregate nominal
amount of £50,000 (representing 5,000,000 Ordinary Shares). This aggregate nominal amount represents approximately 5 per cent of
the issued Ordinary share capital of the Company (excluding treasury shares) as at [TBC] May 2024. The Pre-Emption Group’s Statement
of Principles support the annual disapplication of pre-emption rights in respect of allotments of shares and other equity securities and
sales of treasury shares for cash where these represent no more than 5 per cent of the issued ordinary share capital (exclusive of
treasury shares), without restriction as to the use of proceeds of those allotments.
In accordance with the Pre-Emption Group’s Statement of Principles regarding cumulative usage of authorities within a rolling three-
year period, the Directors also confirm their intention that no more than 7.5 per cent of the issued Ordinary share capital (excluding
treasury shares) will be issued for cash on a non-pre-emptive basis, pursuant to sub-paragraph b) of Resolution 12 and equivalent
authorities in other years during any rolling three-year period, without prior consultation with shareholders.
Resolution 13 is intended to give the Company flexibility to make non-pre-emptive issues of Ordinary Shares in connection with
acquisitions and other capital investments as contemplated by the Pre-Emption Group’s Statement of Principles. The power under
Resolution 13 is in addition to the power set out in Resolution 12 and would be limited to allotments or sales of up to an aggregate
nominal amount of £50,000 (representing 5,000,000 Ordinary Shares). This aggregate nominal amount represents approximately
5 per cent of the issued Ordinary share capital of the Company (excluding treasury shares) as at [TBC] 2024.
RESOLUTION 14: AUTHORITY TO PURCHASE OWN SHARES
Resolution 14 seeks authority, for the Company to make market purchases of its own Ordinary Shares, which would otherwise be
prohibited by the Companies Act 2006. The Directors continue to believe that the Board should retain the flexibility to be able to buy
back the Company’s shares when it is in the best interests of shareholders to do so (taking into account market conditions prevailing
at the time, other investment opportunities, appropriate gearing levels and the overall financial position of the Company), and will result
in an increase in earnings per share; therefore Resolution 14 proposes a renewal of the existing authority.
The Resolution specifies the maximum number of shares that can be acquired (approximately 10 per cent of the issued Ordinary share
capital (excluding treasury shares) of the Company) and the minimum and maximum prices at which they may be bought. Any shares
purchased under the authority granted by the Resolution will either be cancelled or may be held as treasury shares (see further below).
The minimum price, exclusive of expenses, which may be paid for an Ordinary Share is an amount equal to the nominal value of an
Ordinary Share. The maximum price, exclusive of expenses, which may be paid for an Ordinary Share is the higher of: (i) an amount equal
to 5 per cent above the average of the closing middle-market quotations of an Ordinary Share for the five business days immediately
preceding the date of the purchase; and (ii) the price of the last independent trade and the highest current independent purchase bid
on the trading venues where the purchase is carried out.
The authority will expire at the conclusion of the next Annual General Meeting of the Company to be held in 2025 or at the close
of business on 19 September 2025, whichever is the sooner.
RESOLUTION 15: NOTICE PERIOD FOR GENERAL MEETINGS OTHER THAN THE ANNUAL GENERAL MEETING
Under the Companies (Shareholders’ Rights) Regulations 2009, the notice period for general meetings increased to not less than 21 clear
days unless shareholders approve a shorter period, which cannot be less than 14 clear days. Resolution 15 therefore seeks to renew
the authority granted at the last Annual General Meeting allowing the Company to call general meetings (other than an Annual General
Meeting) on 14 clear days’ notice provided that a means of electronic voting is made available to all shareholders for that meeting.
The shorter notice period would not be used as a matter of routine for such meetings, but only where the flexibility is merited by the
business of the meeting and is thought to be to the advantage of shareholders as a whole. Annual General Meetings of the Company
will continue to be held on at least 21 clear days’ notice. The approval will be effective until the conclusion of the Company’s next
Annual General Meeting to be held in 2025, when it is intended that a similar resolution will be proposed.
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NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
ORDINARY RESOLUTIONS
RESOLUTIONS 16 AND 17: BUYBACK AND LTIP WAIVER RESOLUTIONS
The Panel has agreed to grant to the members of the Concert Party following approval by the Independent Shareholders.
Resolution 16 (The Buyback Waiver) – being a waiver of the requirement for the members of the Concert Party to make a mandatory
for the remainder of the share capital of the Company under Rule 9 of the Takeover Code as a result of a buyback conducted pursuant
the Buyback Authority. If approved, the Buyback Waiver would only apply for as long as the Buyback Authority remains in force.
Any renewal of the Buyback Waiver would again be subject to the Independent Shareholder approval at a meeting of Shareholders and
Resolution 17 (The LTIP Waiver) – being a waiver of the requirement for the members of the Concert Party to make a mandatory offer
for the remainder of the share capital of the Company under Rule 9 of the Takeover Code as a result of any exercise of rights to Shares
under the LTIP. If approved, the LTIP Waiver would only apply to LTIP Awards granted to Dirk Brouwer in connection with his role as
Non-Executive Director of the Company (and apply to the maximum amount of Shares as set out in the LTIP Waiver Resolution). Any
other awards granted and exercised under the LTIP members of the Concert Party would be subject to the Independent Shareholder
approval at a further meeting of the Shareholders.
Passing of the Waivers would give the Company flexibility to buy back its Shares and permit the exercise of LTIP Awards without the
members of the Concert Party being obliged to make a general offer for the Company
Further information relating to these resolutions is set out in Part [V] of this document.
PART II – EXPLANATORY NOTES CONTINUED
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NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
PART III – DIRECTORS SEEKING ELECTION OR RE-ELECTION
GUY DAWSON
CHAIRMAN (I-Ch, N-Ch)
Mr Dawson became a Non-Executive Director of ASA International Holding
(“ASA International”) in 2013 and became a Director of the Company on 28 June
2018. He was appointed Chairman of the Board on 1 January 2021. Mr Dawson
continues to chair the Nomination Committee and the Independent Directors’
Committee. Mr Dawson has extensive experience as a Non-Executive Director
and previously served in that capacity on the boards of The BOC Group plc and
Alliance Boots plc. He is currently a Non-Executive Director of Egerton Capital
and Citywire Holdings. He was a founding partner of the independent corporate
advisory firm Tricorn Partners, and prior to that held senior investment banking
positions in London at Nomura, Merrill Lynch and Deutsche Bank.
Guy Dawson was appointed as an independent Non-Executive Director of the
Company on 15 May 2018 and as Chairman of the Board on 1 January 2021.
KARIN KERSTEN
CHIEF EXECUTIVE OFFICER
Ms Kersten joined the management of the Group as Corporate Development
Director on 1 October 2021. She joined the Group from ABN AMRO Bank where
she had a distinguished career, most recently serving as Managing Director, Trade
& Commodity Finance. Ms Kersten is also a Member of the Supervisory Board
of Mondriaan Fonds and Chairman of the Audit Committee of Mondriaan Fonds.
She is a member of the Selection Committee of Hotelschool The Hague.
Karin Kersten was appointed as a Director of the Company on 26 April 2022
and appointed as CEO on 15 June 2023.
DIRK BROUWER
DEPUTY CHAIRMAN
Mr Brouwer co-founded ASA International in 2007 and until 15 June 2023 has
served as its Executive Director and Chief Executive Officer. With over 20 years
of experience in investment banking, and 15 in microfinance, he is also the Managing
Director of Catalyst Microfinance Investors ([‘]CMI[’]), which he co-founded in
2006. Mr Brouwer has held several senior and supervisory positions, having acted
as a board member of CMI and Founder and Managing Director of Sequoia, which
he founded in 2002. Prior to this, he spent 14 years working at Merrill Lynch and
PaineWebber. He is also Non-Executive Chairman of CarbonX.
Dirk Brouwer was appointed as a Director of the Company on 15 May 2018.
On 15 June 2023 Mr Brouwer was appointed as Deputy Chairman of the Board
of ASA International and Special Adviser to the new CEO, the Executive Committee
and the broader management team.
HANNY KEMNA
INDEPENDENT NON-EXECUTIVE DIRECTOR (A, I, R, N)
Ms Kemna has been a Non-Executive Director since 2018 and was appointed as
Senior Independent Director on 1 January 2021. She is the Chair of the board of
Directors for Dutch pension provider and asset manager MN. Ms Kemna is also the
Chair of the Audit Committee at insurer Vivat – Athora NL, at healthcare insurer
Menzis and at the National ICT Institute for Healthcare in the Netherlands. Since
2020, she has served as a deputy member of the Board of the Dutch Court of
Auditors. She worked for Ernst & Young for 22 years and was one of Ernst & Young’s
Global Lead Partners of Operations and IT audit. Ms Kemna has a broad experience
in working with international financial and government institutions.
Hanny Kemna was appointed as an independent Non-Executive Director of the
Company on 28 June 2018and as Senior Independent Director on 1 January 2021.
Hanny Kemna became the Chair of the Remuneration Committee on [8] December 2023
A = member of the Audit and Risk Committee
I = member of the Independent Directors Committee
N = member of the Nomination Committee
R = member of the Remuneration Committee
Ch = Committee Chairman
Biographical details of all Directors seeing re-election at the Meeting are provided in this Part [III].
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NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
DR SALEHUDDIN AHMED
INDEPENDENT NON-EXECUTIVE DIRECTOR (A, I, R, N)
Dr Ahmed has been a Non-Executive Director since December 2020. He is
currently a Professor at the Graduate School of Management at BRAC University
and an Independent Director of Grameenphone Ltd. He is also on the advisory
bodies of several governmental and non-governmental agencies in Bangladesh
and a member of the Board of Trustees of three universities and a postgraduate
institute. Dr Ahmed was the Governor of the Bangladesh Bank (Central Bank)
between 2005 and 2009. Prior to this, he was the Managing Director of Palli
Karma-Sahayak Foundation ([‘]PKSF[’]). He has worked as a Consultant for many
international agencies and has authored over 90 publications.
Salehuddin Ahmed was appointed as an independent Non-Executive Director
of the Company on 7 December 2020.
CHRIS LOW
INDEPENDENT NON-EXECUTIVE DIRECTOR (A, I, R, N)
Mr Low has been a Non-Executive Director since February 2023. Mr Low was
I&M Group Plc’s Regional Director for its East Africa businesses and currently is
a Non-Executive Director of I&M Bank (Uganda) plc and Bank One Ltd, I&M’s JV
Bank in Mauritius. He is on the Board of the Scottish African Business Association,
an Investment Committee member of JPIN Global Ltd and the Zephyr Acorn Fund,
both investors in early-stage impact companies, and advises several FinTech
start-ups. With over 30 years in international financial services, risk management
and digital transformation, Mr Low has specialised in emerging markets, working
across Africa, Asia and the Middle East.
Chris Low was appointed as an independent Non-Executive Director of the
Company on 1 February 2023 and became the Chair of the Audit & Risk
Committee on 15 June 2023.
PART III – DIRECTORS SEEKING ELECTION OR RE-ELECTION CONTINUED
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NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
PART IV – NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the sixth Annual General Meeting of ASA International Group plc (the ‘Company’) will be held at the offices
of [Cavendish, One Bartholomew Close, London, EC1A 7BL] at 11.00[am] (London time) on Thursday 20 June 2024, to consider the
resolutions set out below.
Resolutions 1 to 11 (inclusive) and 16 and 17 are proposed as ordinary resolutions. For each of those resolutions to be passed, more
than half of the votes cast must be in favour of the resolution.
Resolutions 12 to 15 (inclusive) are proposed as special resolutions. For each of those resolutions to be passed, at least three-quarters
of the votes cast must be in favour of the resolution.
THAT the Company’s Annual Report and Financial Statements for the financial year ended 31 December 2023, together with the
reports of the Directors and the Auditor, be received.
THAT the Annual Report on Remuneration, other than the part containing the Directors’ Remuneration Policy, set out on pages [83
and 88 to 91] of the 2023 Annual Report and Financial Statements be approved.
1. THAT Guy Dawson be elected as a Director of the Company.
2. THAT Karin Kersten be elected as a Director of the Company.
3. THAT Dirk Brouwer be elected as a Director of the Company.
4. THAT Hanny Kemna be elected as a Director of the Company.
5. THAT Dr Salehuddin Ahmed be elected as a Director of the Company.
6. THAT Chris Low be elected as a Director of the Company.
7. TH AT Ernst & Young LLP be re-appointed as Auditor of the Company until the conclusion of the next general meeting before
which accounts are laid.
8. THAT the Audit and Risk Committee be authorised to determine the remuneration of the Auditor on behalf of the Board.
9. THAT the Directors be and are hereby generally and unconditionally authorised to exercise all the powers of the Company
pursuant to, and in accordance with, Section 551 of the Act, to allot shares in the Company and to grant rights to subscribe for,
or to convert any security into, shares in the Company:
a. up to a nominal amount of £333,333.33 (such amount to be reduced by the nominal amount allotted or granted under part b)
below in excess of such sum); and
b. comprising equity securities (as defined in Section 560(1) of the Act) up to a nominal amount of £666,666.66 (such amount
to be reduced by any allotments or grants made under part a) above) in connection with an offer by way of a rights issue:
i. to holders of Ordinary Shares in proportion (as nearly as may be practicable) to their existing holdings; and
ii. to holders of other equity securities as required by the rights of those securities or, if the Directors otherwise consider
it necessary, as permitted by the rights of those securities,
and so that the Directors may impose any limits or restrictions and make any arrangements which they consider necessary or
appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under
the laws of, any territory or any other matter, provided that these authorities shall expire at the conclusion of the Annual General
Meeting of the Company to be held in 2025 or at the close of business on 19 September 2025, whichever is the sooner, save that
the Company may before such expiry make offers and enter into agreements which would, or might, require shares to be allotted
or rights to subscribe for or convert securities into shares to be granted after such expiry and the Directors may allot shares or grant
rights to subscribe for or convert securities into shares in pursuance of such an offer or agreement as if the authorities conferred
hereby had not expired.
10
NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
10. THAT if Resolution 11 is passed, the Directors be given powers pursuant to Section 571 of the Act, to allot equity securities (within
the meaning of Section 560(1) of the Act) for cash under the authority conferred by Resolution 11 and/or sell Ordinary Shares held
by the Company as treasury shares for cash as if Section 561 of the Act did not apply to any such allotment or sale provided that
this power shall be limited:
a. to the allotment of equity securities and sale of treasury shares for cash in connection with an offer of, or invitation to apply
for, equity securities (but in the case of an authority granted under part b) of Resolution 11, by way of a rights issue only):
i. to Ordinary shareholders (excluding any shareholder holding shares as treasury shares) in proportion (as nearly as may
be practicable) to their existing holdings of Ordinary Shares; and
ii. to holders of other equity securities, as required by the rights of those securities, or as the Directors otherwise consider
necessary, and so that the Directors may impose any limits or restrictions and make any such arrangements which they
consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory
or practical problems in, or under the laws of, any territory or any other matter; and
b. in the case of the authority granted under part a) of Resolution 11 and/or in the case of any sale of treasury shares for cash,
to the allotment (otherwise than pursuant to sub-paragraph a) above) of equity securities or sale of treasury shares up to
a nominal amount of £50,000,
such power shall apply until the conclusion of the Annual General Meeting of the Company to be held in 2024 or at the close of
business on 19 September 2025, whichever is the sooner, save that, in each case, the Company may during this period make offers
and enter into agreements which would, or might, require equity securities to be allotted (and/or treasury shares to be sold) after
the power ends and the Directors may allot equity securities (and/or sell treasury shares) in pursuance of such an offer or agreement
as if the power conferred hereby had not expired.
11. THAT if Resolution 11 is passed, the Directors be given the power in addition to any power granted under Resolutions 11 and 12
to allot equity securities (within the meaning of Section 560(1) of the Act) for cash under the authority conferred by Resolution 11
and/or sell Ordinary Shares held by the Company as treasury shares for cash as if Section 561 of the Act did not apply to any such
allotment or sale, such power to be:
a. limited to the allotment of equity securities or sale of treasury shares up to a nominal amount of £50,000; and
b. used only for the purposes of financing (or refinancing, if the power is to be used within six months after the original
transaction) a transaction which the Directors determine to be an acquisition or other capital investment of a kind
contemplated by the Statement of Principles on Disapplying Pre-Emption Rights most recently published by the Pre-Emption
Group prior to the date of this notice,
such power shall apply until the conclusion of the Annual General Meeting of the Company to be held in 2025 or at the close of
business on 19 September 2025, whichever is the sooner, save that, in each case, the Company may during this period make offers,
and enter into agreements, which would, or might, require equity securities to be allotted (and/or treasury shares to be sold) after
the power ends and the Directors may allot equity securities (and/or sell treasury shares) in pursuance of such an offer or
agreement as if the power conferred hereby had not expired.
12. THAT if Resolutions 11 and 16 are passed, the Company be authorised, generally and unconditionally in accordance with Section
701 of the Act to make market purchases (as defined in Section 693(4) of the Act) of its Ordinary Shares, such power to be limited:
a. to a maximum number of Ordinary Shares with an aggregate nominal value of up to £100,000;
b. by the condition that the Company does not pay less (exclusive of expenses) for each Ordinary Share than the nominal value
of such share, and that the maximum price which may be paid for an Ordinary Share (exclusive of expenses) is the higher of:
i. 105 per cent of the average of the closing middle-market quotations of an Ordinary Share for the five business days
immediately preceding the date on which the Company agrees to buy the shares concerned, based on share prices
published in the Daily Official List of the London Stock Exchange; and
ii. the price of the last independent trade and the highest current independent purchase bid at the time on the trading
venue where the purchase is carried out, such authority shall expire at the conclusion of the Annual General Meeting
of the Company to be held in 2025, or at the close of business on 19 September 2025, whichever is the sooner,
provided that if the Company has agreed before such expiry to purchase Ordinary Shares where these purchases will
or may be executed (either wholly or in part) after the authority terminates the Company may complete such a purchase
as if the authority conferred hereby had not expired.
NOTICE OF ANNUAL GENERAL MEETING CONTINUED
11
NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
13. THAT a general meeting of the Company (not being an Annual General Meeting) may be called on notice of not less than 14 clear
days, provided that this authority shall expire at the conclusion of the Annual General Meeting of the Company to be held in 2025.
14. THAT the waiver granted by the Panel on Takeovers and Mergers of the obligation that would otherwise arise on any member
of the concert party (comprising Dirk Brouwer and the entities through which he indirectly holds his interests in the Company,
including CMIMC, CMI and Continuity), both individually and collectively, to make a general offer to the other shareholders of the
Company pursuant to Rule 9 of the Takeover Code as a result of an increase in the percentage of shares carrying voting rights held
by them following a buyback of the Company’s shares conducted in accordance with the terms of the Buyback Authority granted
to the Directors at the Company’s most recent Annual General Meeting, that could potentially increase the Concert Party’s interest
in shares carrying voting rights from [46,3] per cent. of the voting share capital of the Company, up to a maximum of approximately
51.5 per cent. of the Shares of the Company (carrying equivalent voting rights) (assuming no prior increase in the Concert Party’s
interest in shares resulting from the exercise of the LTIP Awards by Dirk Brouwer, pursuant to the waiver granted by Resolution
17), as described in the circular of which this Notice forms part, be and is hereby approved..
15. THAT the waiver granted by the Panel on Takeovers and Mergers of the obligation that would otherwise arise on any member
of the Concert Party (comprising Dirk Brouwer and the entities through which he indirectly holds his interests in the Company,
including CMIMC, CMI and Continuity), both individually and collectively, to make a general offer to the other shareholders of the
Company pursuant to Rule 9 of the Takeover Code as a result of the acquisition of Shares pursuant to the terms of the LTIP, that
could potentially increase the Concert Party’s interest in shares carrying voting rights from 46.3per cent. of the voting share capital
of the Company, up to a maximum of approximately 46.6 per cent. of the Shares of the Company (carrying equivalent voting rights)
(assuming no prior increase in the Concert Party’s interest in shares resulting from a buyback of the Company’s shares conducted
in accordance with the terms of the Buyback Authority, pursuant to the waiver granted by Resolution 16), as described in the
circular of which this Notice forms part, be and is hereby approved.
By order of the Board
PRISM COSEC
COMPANY SECRETARY
ASA International Group plc
[date] May 2024
12
NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
NOTES TO THE NOTICE OF THE MEETING
ATTENDING THE MEETING AND ASKING QUESTIONS
ATTENDING ONLINE
Shareholders are encouraged to participate in the Meeting online by means of dialling in the specified number.
ATTENDING IN PERSON
To be entitled to attend and vote at the Annual General Meeting (the “Meeting”) (and for the purpose of the determination by the
Company of the votes they may cast), shareholders must be registered in the Register of Members of the Company at 6.30[pm]
on [[Tuesday] 18 June ] 2024 (or, in the event of any adjournment, at 6.30[pm] on the date which is two days before the time of the
adjourned Meeting). Changes to the Register of Members after the relevant deadline shall be disregarded in determining the rights
of any person to attend and vote at the Meeting.
Any member attending the Meeting, whether in person or online, has the right to ask questions. The Company must cause to be
answered any such question relating to the business being dealt with at the Meeting, but no such answer need be given if (a) to do
so would involve the disclosure of confidential information, (b) the answer has already been given on a website in the form of an answer
to a question, or (c) it is undesirable in the interests of the Company or the good order of the Meeting that the question be answered.
APPOINTING A PROXY
Shareholders are entitled to attend, speak and vote at the Meeting and may appoint a proxy to exercise all or any of their rights to attend
and to speak and vote on their behalf at the Meeting. A shareholder may appoint more than one proxy in relation to the Meeting
provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder.
The Articles provide that if a member submits more than one valid proxy appointment in respect of the same share, the appointment
received last (regardless of its date or the date on which it is signed) before the latest time for the receipt of proxies will take precedence.
If it is not possible to determine the order of receipt, none of the forms will be treated as valid.
A vote indicated on the proxy form as [‘]withheld[’] is not a vote in law, which means that the vote will not be counted in the proportion
of votes [‘]for[’] and [’]against[’] a Resolution.
Where a proxy has been appointed by a member, if such member does not give any instructions in relation to that Resolution that
member should note that their proxy will have authority to vote on the Resolution as he/she thinks fit.
Any power of attorney or any other authority under which the form of proxy is signed (or a duly certified copy of such power or
authority) must be included with the proxy form. In the case of a member which is a company, the form of proxy should either be sealed
by that company or signed by someone authorised to sign it.
A form of proxy, which may be used to make such appointment and give proxy instructions, accompanies this notice. If you do not have
a form of proxy and believe that you should have one, or if you require additional forms, please contact Equiniti on +44 (0) 371 384 2030.
If calling from outside of the UK, please ensure the country code is used (calls outside the United Kingdom will be charged at the
applicable international rate). Lines are open between 8.30[am] and 5.30[pm], Monday to Friday, excluding public holidays in England
and Wales.
To be valid, forms of proxy must be lodged by one of the following methods by 11.00[am] on Tuesday 18 June 2024:
• in hard copy form by post to the Company’s Registrar Equiniti, Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex,
BN99 6DA; or
• in the case of CREST members or CREST Personal Members, by utilising the CREST electronic proxy appointment service in
accordance with the procedures set out below; or
• by submitting your proxy appointment electronically via the internet.
ONLINE VOTING
To submit an electronic proxy appointment log on to Equiniti’s website www.sharevote.co.uk. Shareholders will need their Voting ID,
Task ID and Shareholder Reference Number, printed on the face of the accompanying Form of Proxy. Alternatively, if you have already
registered with the Registrar’s on-line portfolio service, Shareview, you can submit your proxy by logging onto your portfolio at
www.shareview.co.uk using your usual ID and password. Once logged in simply click [‘]View[’] on the [‘]My Investments[’] page, click
on the link to vote then follow the on screen instructions.
13
NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
CREST MEMBERS
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by utilising
the procedures described in the CREST Manual (available via www.euroclear.com/en/about/our-rules.html). CREST Personal Members
or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their
CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a ”CREST
Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s specifications, and must contain
the information required for such instruction, as described in the CREST Manual. The message, regardless of whether it constitutes
the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy, must, in order to be valid,
be transmitted so as to be received by Equiniti (ID: RA19) by 11.00[am] on Tuesday 18 June 2024. For this purpose, the time of receipt
will be taken to be the time (as determined by the time stamp applied to the message by the CREST Application Host) from which the
issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change
of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors, or voting service providers should note that Euroclear UK & Ireland
Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will,
therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take
(or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider, to procure
that their CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted
by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors
or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the
CREST system and timings.
The Company may treat an instruction as invalid in the circumstances set out in regulation 35(5)(a) of the Uncertificated Securities
Regulations 2001.
NOMINATED PERSONS AND INFORMATION RIGHTS
Any person to whom this notice is sent who is a person nominated under Section 146 of the Companies Act 2006 to enjoy information
rights (a “Nominated Person”) may, under an agreement between him/her and the shareholder by whom he/she was nominated, have
a right to be appointed (or to have someone else appointed) as a proxy for the Meeting.
If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement,
have a right to give instructions to the shareholder as to the exercise of voting rights.
However, the statement of the rights of shareholders in relation to the appointment of proxies described above does not apply
to Nominated Persons. The rights described in those paragraphs can only be exercised by shareholders of the Company.
JOINT HOLDERS AND CORPORATE REPRESENTATIVES
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted
by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the
Company’s Register of Members in respect of the joint holding (the first-named being the most senior).
Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers
as a member provided that they do not do so in relation to the same shares.
MEMBERS’ POWER TO REQUIRE WEBSITE PUBLICATION OF AUDIT CONCERNS
Under Section 527 of the Companies Act 2006, members meeting the threshold requirements set out in that section have the right
to require the Company to publish on a website a statement setting out any matter relating to: (i) the audit of the Company’s accounts
(including the Auditor’s Report and the conduct of the audit) that are to be laid before the Meeting; or (ii) any circumstance connected
with an Auditor of the Company ceasing to hold office since the previous meeting at which annual accounts and reports were laid in
accordance with Section 437 of the Companies Act 2006. The Company may not require the shareholders requesting any such website
publication to pay its expenses in complying with Sections 527 or 528 of the Companies Act 2006. Where the Company is required to
place a statement on a website under Section 527 of the Companies Act 2006, it must forward the statement to the Company’s Auditor
not later than the time when it makes the statement available on the website. The business which may be dealt with at the Meeting
includes any statement that the Company has been required under Section 527 of the Companies Act 2006 to publish on a website.
SHARE CAPITAL
As at [TBC] May 2024 (being the date of this notice) the Company’s issued Ordinary share capital consisted of 100,000,000 Ordinary
Shares, carrying one vote each. Therefore the total voting rights in the Company as at [TBC] 2024 were 100,000,000.
14
NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
NOTES TO THE NOTICE OF THE MEETING CONTINUED
QUERIES AND ACCESS TO INFORMATION
Except as provided above, members who have general queries about the Meeting should use the following means of communication
(no other methods of communication will be accepted): on +44 (0) 371 384 2030. If calling from outside of the UK, please ensure the
country code is used (calls outside the United Kingdom will be charged at the applicable international rate). Lines are open 8.30[am]
to 5.30pm Monday to Friday, excluding public holidays in England and Wales. You may not use any electronic address provided either
(a) in this Notice of Annual General Meeting, or (b) in any related documents (including the Chairman’s letter and form of proxy)
to communicate with the Company for any purposes other than those expressly stated.
DOCUMENTS AVAILABLE FOR INSPECTION
The terms and conditions of appointment and letters of appointment of Non-Executive Directors and all the Directors’ service contracts
will be available for inspection at the Meeting for 15 minutes prior to the Meeting and during the Meeting.
If you would like to request a copy of this notice in an alternative format such as in large print or audio, please contact Equiniti
on +44 (0) 371 384 2030. If calling from outside of the UK, please ensure the country code is used.
A copy of this notice, and other information required by Section 311A of the Companies Act 2006, can be found at
www.asa-international.com.
15
NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
1 THE TAKEOVER CODE AND THE WAIVER RESOLUTIONS
The Takeover Code applies to the Company. Under Rule 9 of the Takeover Code, any person who acquires an interest in shares
(as defined in the Takeover Code) which, taken together with any interest in shares already held by that person or any interest in shares
held or acquired by persons acting in concert with them, carry 30 per cent. or more of the voting rights of a company which is subject
to the Takeover Code, is normally required to make an offer to all the remaining shareholders to acquire their shares in the company.
Similarly, when any person, together with persons acting in concert with that person, is interested in shares which in the aggregate carry
not less than 30 per cent. of the voting rights of such a company but does not hold shares carrying more than 50 per cent. of the voting
rights of the company, an offer will normally be required if any further interests in shares carrying voting rights are acquired by such
person or any person acting in concert with that person.
An offer under Rule 9 must be made in cash at the highest price paid by the person required to make the offer, or any person acting
in concert with such person, for any interest in shares of the Company during the 12 months prior to the announcement of the offer.
Under Rule 37.1 of the Takeover Code, when a company redeems or purchases its own voting shares, any resulting increase in the
percentage of shares carrying voting rights in which a shareholder and any persons acting in concert with them are interested will
normally be treated as an acquisition for the purpose of Rule 9 of the Takeover Code.
2 INFORMATION ON THE CONCERT PARTY
Certain shareholders in the Company are taken to constitute a ‘concert party’ for the purpose of the Takeover Code. The Company
has agreed with the Panel that those shareholders are Dirk Brouwer and the entities through which he indirectly holds his interests
in the Company, including CMI and Continuity (CMI and Continuity are ultimately controlled by Dirk Brouwer).
Dirk Brouwer co-founded ASA International in 2007 and served as its Executive Director and Chief Executive Officer until 15 June
2023 and which time he was appointed as Deputy Chairman of the Board of ASA International and Special Adviser to the new CEO,
the Executive Committee and the broader management team. He is also Director of CMI, Catalyst Microfinance Investment Company,
and CMIMC, all of which he co-founded in 2006. Prior to 2007, Dirk held several senior positions at PaineWebber, Merrill Lynch
and Sequoia B.V., which he founded in 2002. Dirk is also non-executive Chairman of CarbonX. At the AGM, Mr. Brouwer will step into
a new role. He will be appointed as (i) Deputy Chairman of the Board and (ii) Special Adviser to the new CEO, the Executive Committee
and the broader management team.
As at the Latest Practicable Date, the Concert Party is interested in 46,328,944 Shares, representing 46.30 per cent. of the voting
share capital of the Company. As this level is already above the threshold of 30 per cent. of the issued share capital of the Company,
but below the 50 per cent., specified in Rule 9 of the Takeover Code, any incremental increase in the Concert Party’s interest in voting
rights could require the Concert Party to make a mandatory offer for the remainder of the share capital of the Company under such rule.
3 BUYBACK AUTHORITY AND LTIP AWARDS
As noted in Part I of this document, the Directors are seeking approval of the Buyback Authority at the 2024 AGM and the
Remuneration Committee has made LTIP Awards to Dirk Brouwer which are not expected to become exercisable prior to 28 October
2025.
The Takeover Code provides that the exercise of such LTIP Awards will be considered to be an acquisition of an interest in Shares.
Assuming no prior increase in the Concert Party’s interest in Shares resulting from a buyback of Shares conducted in accordance with
the terms of the Buyback Authority, following the exercise of the LTIP Awards by Dirk Brouwer, the Concert Party’s interest in Shares
carrying voting rights could increase from 46.3 per cent. of the voting share capital of the Company, up to a maximum of approximately
46,6 per cent. of the Shares (carrying equivalent voting rights).
Assuming no prior increase in the Concert Party’s interest in Shares resulting from the exercise of the LTIP Awards by Dirk Brouwer,
following the completion of a share buyback in accordance with the Buyback Authority the Concert Party’s interest in Shares carrying
voting rights could increase from 46.3 per cent. of the voting share capital of the Company, up to a maximum of approximately
51.5 per cent. of the Shares (carrying equivalent voting rights).
The Panel has agreed to grant the Buyback Waiver and the LTIP Waiver subject to, in each case, the approval of the Independent
Shareholders having been obtained. Accordingly, the Waiver Resolutions are being proposed at the 2024 AGM and will be taken
on a poll. A representative of each member of the Concert Party may attend the 2024 AGM but no member of the Concert Party
(nor any nominee or representative of them) will be entitled to vote on the Waiver Resolutions.
Members of the Concert Party will not be restricted from making an offer for the Company following the approval of the Waiver
Resolutions by the Independent Shareholders at the 2024 AGM.
PART V – EXPLANATORY CIRCULAR TO SHAREHOLDERS IN CONNECTION WITH A PROPOSED
APPROVAL OF WAIVER OF OBLIGATIONS UNDER RULE 9 OF THE TAKEOVER CODE
16
NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
You should note that if (i) the Company fully exercises the Buyback Authority to buy back and cancel or return to treasury the Shares
so acquired and/or (ii) any LTIP Awards held by Dirk Brouwer are exercised (giving rise to an acquisition of Shares), and the Waiver
Resolutions are passed, members of the Concert Party would hold more than 50 per cent. of the Company’s voting share capital.
In those circumstances, members of the Concert Party would be permitted (for so long as they continue to be treated as acting in
concert) to make purchases of Shares without incurring an obligation under Rule 9 of the Takeover Code to make a general offer to all
holders of Shares although individual members of the Concert Party will not be able to increase their percentage interest in the Shares
to 30 per cent. or more or if already holding more than 30 per cent. of the Shares, at all without Panel consent or without also being
required to make an offer under Rule 9 of the Takeover Code.
For the avoidance of doubt, the Waivers, which are valid only for so long as the authority granted pursuant to Waiver Resolutions
remain in force, apply only in respect of increases in shareholdings of the Concert Party resulting from the proposals set out in this
document and not in respect of other increases in its holdings.
4 DIRECTORS, MANAGEMENT, EMPLOYEES, RESEARCH AND DEVELOPMENT AND CONTINUATION OF THE BUSINESS
OF THE COMPANY
The Directors intend to continue to conduct the business of the Company in the same manner as it is currently conducted and there
are no plans to redeploy its fixed assets or to introduce any substantial changes in the business of the Company, the management
of the Company, the continued employment of its employees or their terms of employment.
The members of the Concert Party have confirmed to the Company that their intention is, following any increase of their shareholding
as a result of the Buyback Authority or the exercise of the LTIP Awards, that the business of the Company be conducted in substantially
the same manner as at present. The members of the Concert Party have also confirmed that they are not proposing to seek any change
to: (i) the location of the Company’s business, headquarters or headquarter functions; (ii) the management of the Company; (iii) the
continued employment of its employees, their terms of employment or the balance of skill and functions; (iv) contributions to the
Company’s pension scheme (including arrangements for the funding of any scheme deficit (noting that the Company does not operate
a defined benefit pension scheme)) or the accrual of benefits for existing members; or (v) the trading facilities that are maintained in
respect of the Shares, nor is there any intention to redeploy the Company’s fixed assets.
The Independent Directors approve of these intentions.
5 RECOMMENDATION
The Independent Directors, who have been so advised by Stifel in connection with the potential buyback of Shares and exercise of LTIP
Awards (including in respect of the implications on the Independent Shareholders of any controlling position that such buyback of Shares
or exercise of LTIP Awards may create and effect on shareholders generally of any buyback of Shares conducted in accordance with the
Buyback Authority or exercise of LTIP Awards), believe that obtaining the Waivers is fair and reasonable and in the best interests of the
Independent Shareholders and the Company as a whole. In providing advice to the Independent Directors, Stifel has taken into account
the Independent Directors’ commercial assessments.
Stifel confirms that it, and any person who is or is presumed to be acting in concert with it, is independent of members of the Concert
Party and has no personal, financial or commercial relationship, or arrangements or understandings with the Concert Party. Stifel has
given and has not withdrawn its written consent to the inclusion in this document of its name and the references to it in the form and
context in which they are included.
Accordingly, the Independent Directors recommend that Independent Shareholders vote in favour of the Waiver Resolutions
(Independent Directors do not own Shares in the Company).
In accordance with the provisions of the Takeover Code, each member of the Concert Party is considered to be interested in the
outcome of the Waiver Resolutions and, accordingly, each of them will not vote on the Waiver Resolutions. They have also not taken
part in any decision of the Independent Directors relating to the Waivers.
6 FURTHER INFORMATION
Your attention is drawn to the further information set out in Parts VI to VIII of this document.
PART V – EXPLANATORY CIRCULAR TO SHAREHOLDERS IN CONNECTION WITH A PROPOSED
APPROVAL OF WAIVER OF OBLIGATIONS UNDER RULE 9 OF THE TAKEOVER CODE
CONTINUED
NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
17
PART A: GENERAL INFORMATION ON THE CONCERT PARTY
1 COMPOSITION OF THE CONCERT PARTY
Dirk Brouwer and the entities through which he indirectly holds his interests in the Company, including CMI and Continuity are deemed
to be acting in concert (as defined in, and for the purposes of the Takeover Code). Further information on members of the Concert Party
is as follows:
(A) DIRK BROUWER
Dirk Brouwer co-founded ASA International in 2007 and has since then served as its Executive Director and Chief Executive Officer.
He is also director of CMI, CMIC, and CMIMC, all of which he co-founded in 2006. On 15 June 2023, Mr. Brouwer was appointed as
(i) Deputy Chairman of the Board and (ii) Special Adviser to the new CEO, the Executive Committee and the broader management team.
Dirk Brouwer was appointed as a Director of the Company on 15 May 2018.
(B) CMI
Catalyst Microfinance Investors (CMI) is a private company limited by shares incorporated on 13 June 2006 under the laws of Mauritius.
It is structured as an investment fund and was established by, amongst others, the Chief Executive Officer, Dirk Brouwer. CMI aimed
invest in emerging, high potential microfinance institutions.
The principal address of CMI is 9th Floor, Standard Chartered Tower, 19 Cybercity, Ebene, Mauritius. CMI and Continuity are ultimately
controlled by Dirk Brouwer through CMIMC.
(C) CONTINUITY
Catalyst Continuity Ltd. (Continuity) is a private company limited by shares incorporated on 12 June 2018 under the laws of Mauritius.
It is a holding vehicle for the interests of certain senior managers in the Company.
The principal address of Continuity is 9th Floor, Standard Chartered Tower, 19 Cybercity, Ebene, Mauritius. CMI and Continuity are
ultimately controlled by Dirk Brouwer through CMIMC.
2 DIRECTORS AND ULTIMATE OWNERS OF MEMBERS OF THE CONCERT PARTY
The Directors of each member of the Concert Party (other than Dirk Brouwer) and their respective functions at the date of this
document are as follows:
(A) CMI
Dirk Brouwer Director
Mervyn Chan Director
Anwarul Hoque Choudhury Director
Paul DiLeo Director
Praful Patel Director
(B) CONTINUITY
Dirk Brouwer Director
Mervyn Chan Director
Nirushka Busguth Director
CMI and Continuity are ultimately controlled by Dirk Brouwer through CMIMC.
3 RELATIONSHIPS, ARRANGEMENTS AND UNDERTAKINGS
3.1 Members of the Concert Party have not entered into any relationships (whether personal, financial or commercial), arrangements
or understandings with (i) any of the Independent Directors (or their close relatives and related trusts); (ii) any of the Independent
Shareholders (or any person who is, or is presumed to be, acting in concert with any such shareholder); or (iii) Stifel (or any person
who is, or is presumed to be, acting in concert with Stifel) which has any connection with or dependence upon the proposals set
out in this document or for the transfer of any Shares acquired by the Company pursuant to the Buyback Authority or by the
Concert Party or any member of the Concert Party.
3.2 Members of the Concert Party has not entered into or proposed to enter into any form of incentivisation arrangements with
members of the Company’s management.
4 INFORMATION ON THE CONCERT PARTY’S INTERESTS IN THE COMPANY
4.1 The shareholdings and dealings of each member of the Concert Party in the Company are set out in paragraph 4 of Part VIII.
PART VI – INFORMATION ON THE CONCERT PARTY
NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
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18
4.2 Set out below is the maximum individual and aggregate percentage of the issued share capital of the Company which the members
of the Concert Party would be interested in, assuming (i) the Buyback Authority is implemented in full; (ii) no exercise of any LTIP
Awards; (iii) no pro rata participation or other sales of interests in the Shares by any relevant Shareholder in connection with any
share buybacks or otherwise; and (iv) no other person exercise any options or any other rights to subscribe for the Shares:
Name
Number of
Shares
Percentage of issued share capital
of the Company after Buyback
implemented in full
CMI 29, 217,82 32.5%
Continuity 17,111,118 19.0%
Concert Party 46,328,944 51.5%
4.3 Set out below is the maximum individual and aggregate percentage of the issued share capital of the Company which the members
of the Concert Party would be interested in, assuming (i) no use by the Company of the Buyback Authority; (ii) exercise of the LTIP
Awards in full by the acquisition of
(1)
; (iii) no pro rata participation or other sales of interests in Shares by any relevant Shareholder
in connection with any share buybacks or otherwise; and (iv) no other person exercising any options or any other rights to
subscribe for Shares, the Concert Party’s and each relevant shareholder’s maximum potential interest in the voting share capital
of the Company if the Waivers are approved would be as set out in the following table:
Name
Number of
Shares
Percentage of issued share capital
of the Company after LTIP Awards
exercised in full
Dirk Brouwer 282,341 0.3%
CMI 29, 217,82 29.2%
Continuity 17,111,118 17.1%
Concert Party 46,611.285 46.6%
Note:
(1) To be confirmed if the awards will be satisfied out of (i) a new issue of shares is proposed to satisfy the awards, (ii) market purchase shares or (iii) treasury shares (if such
shares are available). The indicative calculations assume that new shares are not issued and (therefore) the Concert Party’s shareholding is at the highest possible level
(assuming no use by the Company of the Buyback Authority).
4.4 Set out below is the maximum individual and aggregate percentage of the issued share capital of the Company which would
be beneficially held by the members of the Concert Party, assuming (i) full use by the Company of the Buyback Authority;
(ii) subsequent exercise of the LTIP Awards in full by [either the transfer of Shares held in treasury by the Company or the issue
of new Shares]
(2)
; (iii) no pro rata participation or other sales of interests in Shares by any relevant shareholder in connection with
any share buybacks or otherwise; and (iv) no other person exercising any options or any other rights to subscribe for Shares, the
Concert Party’s and each relevant shareholder’s maximum potential interest in the voting share capital of the Company if the
Waivers are approved would be as set out in the following table:
Name
Number of
Shares
Percentage of issued share capital
of the Company after Share
Buybacks and LTIP Awards
exercised in full
Dirk Brouwer 282,341 0.3%
CMI 29, 217,82 32.5%
Continuity 17,111,118 19.0%
Concert Party 46,611,285 51.8%
Note:
(2) See footnote 1 above.
5 DISCLOSURE OF INTERESTS AND DEALINGS IN THE RELEVANT SECURITIES OF THE MEMBERS OF THE CONCERT PARTY
The interests and dealings by the Concert Party and directors in the relevant securities of each member of the Concert Party are set out
in paragraph 4 of Part VIII of this document.
6 MATERIAL CONTRACTS OF THE CONCERT PARTY
No contracts have been entered into by the Concert Party, other than in the ordinary course of business, within the period of two years
prior to the posting of this document which are or may be material.
PART B: FINANCIAL INFORMATION RELATING TO THE CONCERT PARTY
No financial information is available in respect of any member of the Concert Party. No member of the Concert Party has publicly
available accounts.
PART C: CONCERT PARTY RATINGS INFORMATION
There are no current ratings or outlooks publicly accorded to any member of the Concert Party by ratings agencies.
PART VI – INFORMATION ON THE CONCERT PARTY CONTINUED
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AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
PART A: FINANCIAL INFORMATION RELATING TO COMPANY
The following table sets out financial information in respect of the Company as required by Rule 24.3(e) of the Takeover Code.
The documents referred to in the table, the contents of which have previously been announced through a Regulatory Information
Service, are incorporated into this document by reference pursuant to Rule 24.15 of the Takeover Code:
Name
Section Page reference in relevant document
2023 financial statements
(included in the Annual
Report) Independent auditor’s report [XX] to [XX]
Consolidated statement of profit or loss and other comprehensive income [XX]
Consolidated statement of financial position [XX]
Company statement of changes in equity [XX]
Consolidated statement of cash flows [XX]
Notes to the consolidated financial statements [XX] to [XX]
Statutory statement of profit or loss and other comprehensive income [XX]
Statutory statement of financial position [XX]
Statutory statement of changes in equity [XX]
Statutory statement of cash flows [XX]
Notes to the statutory financial statements [XX]
2022 financial statements
(included in the Annual
Report) Independent auditor’s report 99 to 105
Consolidated statement of profit or loss and other comprehensive income 106
Consolidated statement of financial position 107
Company statement of changes in equity 108
Consolidated statement of cash flows 109
Notes to the consolidated financial statements 110 to 163
Statutory statement of profit or loss and other comprehensive income 164
Statutory statement of financial position 165
Statutory statement of changes in equity 166
Statutory statement of cash flows 167
Notes to the statutory financial statements 168 to 170
The information is available in “read-only” format and can be printed from the web address detailed above.
NO INCORPORATION OF WEBSITE INFORMATION
Neither the content of the Company’s website, nor the content of any website accessible from hyperlinks on Company’s website,
is incorporated into, or forms part of, this document.
PART B: COMPANY RATINGS INFORMATION
There are no current ratings or outlooks publicly accorded to Company by ratings agencies.
PART VII – FINANCIAL AND RATINGS INFORMATION RELATING TO COMPANY
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NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
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1 RESPONSIBILITY
1.1 Save for Dirk Brouwer in relation to the views of the Independent Directors as to the merits of the Waiver Resolutions, the
Directors, whose names appear in paragraph 3 of this Part VIII, accept responsibility for the information contained in this document
(including any expressions of opinion), other than information relating to each member of the Concert Party, the directors of
any member of the Concert Party and their immediate families, related trusts and companies and persons connected to them.
To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case), the
information contained in this document (including any expressions of opinion) for which they are responsible is in accordance with
the facts and does not omit anything likely to affect the import of such information.
1.2 Dirk Brouwer and the directors of each member of the Concert Party, whose names are set out in Part VI of this document,
accept responsibility for the information contained in this document (including any expressions of opinion) relating to such member
of the Concert Party, the directors of such member of Concert Party and their immediate families, related trusts and companies
and persons connected to them. To the best of the knowledge and belief of each member of the Concert Party (who have taken all
reasonable care to ensure that such is the case), the information contained in this document (including any expressions of opinion)
for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such
information.
2 INFORMATION ON COMPANY
2.1 The Company is a public company limited by shares in England and Wales with registered number 11361159. The Shares are
quoted on the London Stock Exchange with designation ASAI.
2.2 The principal legislation under which the Company operates is the Companies Act and the regulations made thereunder.
2.3 The Company’s registered office is at Highdown House, Yeoman Way, Worthing, West Sussex, BN99 3HH.
2.4 ASA International is one of the world’s largest international microfinance institutions providing small, socially responsible loans
to low-income entrepreneurs, most of whom are women, across Asia and Africa.
3 DIRECTORS
3.1 The Directors of the Company and their respective functions at the date of this document are as follows:
Guy Dawson Non-Executive Chairman
Karin Kersten Chief Executive Officer
Dirk Brouwer Non-Executive Director
Hanny Kemna Non-Executive Director
Dr Salehuddin Ahmed Non-Executive Director
Chris Low Non-Executive Director
3.2 Dirk Brouwer is not considered to be independent because he is a member of the Concert Party.
3.3 Further information relating to the Directors is included on pages [58 to 59] of the Annual Report.
3.4 With the exception of the Concert Party, the Directors are unaware of any agreements, arrangements or understandings between
any of the Directors and any of the Shareholders which would amount to such Shareholders acting in concert with any of the
Directors.
4 INTERESTS AND DEALINGS
4.1 For the purposes of this paragraph 4:
(i) “acting in concert” has the meaning given to it in the Takeover Code;
(ii) “dealing” or “dealt” includes the following:
(1) the acquisition or disposal of relevant securities, of the right (whether conditional or absolute) to exercise or direct the
exercise of the voting rights attaching to securities or of general control of securities;
(2) the taking, granting, acquisition, disposal, entering into, closing out, termination, exercise (by either party) or variation
of an option (including a traded option contract) in respect of any relevant securities;
(3) subscribing or agreeing to subscribe for relevant securities;
(4) the exercise or conversion, whether in respect of new or existing securities, of any relevant securities carrying
conversion or subscription rights;
(5) the acquisition or, disposal of, entering into, closing out, exercise (by either party) of any rights under, or variation of,
a derivative referenced, directly or indirectly, to relevant securities;
(6) entering into, terminating or varying the terms of any agreement to purchase or sell relevant securities;
(7) the redemption or purchase of, or taking or exercising an option over, any of its own relevant securities by the Concert
Party; and
(8) any other action resulting, or which may result, in an increase or decrease in the number of relevant securities in which
a person is interested or in respect of which they have a short position;
PART VIII – ADDITIONAL INFORMATION
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NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
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(iii) “Disclosure Period” means the 12 months prior to close of business on Latest Practicable Date;
(iv) “derivative” includes any financial product whose value in whole or in part is determined directly or indirectly by reference
to the price of an underlying security;
(v) “Financial Collateral Arrangement” means an arrangement of the kind referred to in Note 4 on Rule 4.6 of the Takeover Code;
(vi) “relevant securities” the Shares and securities carrying conversion or subscription rights into the Shares;
(vii) “short position” means any short position (whether conditional or absolute and whether in the money or otherwise) including
any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person
to purchase or take delivery; and
(viii) a person is treated as “interested” in securities if they have a long economic exposure, whether absolute or conditional,
to changes in the price of those securities (and a person who only has a short position in securities is not treated as interested
in those securities). In particular, a person is treated as “interested” in securities if:
(1) they own them;
(2) they have the right (whether conditional or absolute) to exercise or direct the exercise of the voting rights attaching
to them or has general control of them;
(3) by virtue of any agreement to purchase, option or derivative, they:
(a) have the right or option to acquire them or call for their delivery; or
(b) are under an obligation to take delivery of them, whether the right, option or obligation is conditional or absolute
and whether it is in the money or otherwise; or
(4) they are a party to any derivative:
(a) whose value is determined by reference to their price; and
(b) which results, or may result, in them having a long position in them.
4.2 As at the close of business on Latest Practicable Date:
(i) [The following Directors and their respective related parties had an interest in, a right to subscribe in or a short position in
certain relevant securities. The nature of the interests or rights concerned and number of relevant securities to which these
apply are listed below:]
(1)
Name
Nature of interest or rights concerned Number of Shares Percentage of issued share capital
Guy Dawson Shares [XX] [XX.X]%
Dirk Brouwer
(2)(3)(4)
Shares [XX] [XX.X]%
Karin Kersten Shares [XX] [XX.X]%
Hanny Kemna Shares [XX] [XX.X]%
Dr Salehuddin Ahmed Shares [XX] [XX.X]%
Chris Low Shares [XX] [XX.X]%
Notes:
(1) Nature of interests or rights concerned and whether short position, option etc. to be disclosed.
(2) Reflects the Company’s share capital held in the form of indirect beneficial holdings of Shares through Continuity. The votes attaching to the Shares held by Continuity
are ultimately controlled by CMIMC. Decisions taken by CMIMC, including decisions as to the voting of the relevant Shares, are made by the board of directors of CMIMC,
which includes Dirk Brouwer. CMIMC is owned by entities ultimately controlled by Dirk Brouwer.
(3) Dirk Brouwer’s interests in the Company’s share capital are held in the form of indirect beneficial holdings through CMI and Continuity. Each of CMI and Continuity
is ultimately controlled by Dirk Brouwer via CMIMC.
(4) As a result of his ownership and control of CMI and Continuity, Dirk Brouwer has voting control in respect of 46,328,944 Shares, representing 46.3 per cent. of the issued
share capital of the Company
[(5) On 28 October 2022, each of Dirk Brouwer, Aminur Rashid and Karin Kersten were granted options over Shares pursuant to the LTIP, in amounts equal to 282,341;
119,777 and 157,253 Shares (respectively).]
[(6) Aminur Rashid has an indirect entitlement to the proceeds of the future sales of 373,178 shares of the Company, such proceeds to be allocated to him as a beneficiary
of the ASA International Retirement Scheme (For the avoidance of doubt, Mr. Rashid does not own any shares. Any payment of proceeds following from the entitlement
will involve a decision by the Trustee of the ASA International Retirement Scheme to pay out any such proceeds)]
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NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
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(ii) The following directors of members of the Concert Party and their respective related parties had an interest in, a right
to subscribe in or a short position in certain relevant securities. The nature of the interests or rights concerned and number
of relevant securities to which these apply are listed below:
Name
Nature of interest or rights concerned
1
Number of Shares
Percentage of current
issued share capital
Dirk Brouwer
(1)(2)(3)
Shares [XX] [XX]%
[XXX] [Xxxxxxxx] [XX] [XX]%
Notes:
(1) Reflects the Company’s share capital held in the form of indirect beneficial holdings of Shares through Continuity. The votes attaching to the Shares held by Continuity
are ultimately controlled by CMIMC. Decisions taken by CMIMC, including decisions as to the voting of the relevant Shares, are made by the board of directors of CMIMC,
which includes Dirk Brouwer. CMIMC is owned by entities ultimately controlled by Dirk Brouwer.
(2) Dirk Brouwer’s interests in the Company’s share capital are held in the form of indirect beneficial holdings through CMI and Continuity. Each of CMI and Continuity
is ultimately controlled by Dirk Brouwer via CMIMC.
(3) As a result of his ownership and control of CMI and Continuity, Dirk Brouwer has voting control in respect of [46,328,944] Shares, representing [47.3 0 ] per cent. of the
issued share capital of the Company
(iii) The following members of the Concert Party had an interest in, a right to subscribe in or a short position in certain relevant
securities. The nature of the interests or rights concerned and number of relevant securities to which these apply are listed
below:
Name
Nature of interest or rights concerned Number of Shares
Percentage of current
issued share capital
Dirk Brouwer
(1)(2)(3)
Shares [XX] [XX.X]%
CMI
(4)[(5)(6)]
Shares [XX] [XX.X]%
Continuity
(4)[(6)]
Shares [XX] [XX.X]%
Notes:
(1) Dirk Brouwer’s interests in the Company’s share capital are held in the form of indirect beneficial holdings through CMI and Continuity. Included within the Shares owned
by CMI and Continuity, Dirk Brouwer has an indirect aggregate beneficial ownership interest in 20,266,146 shares representing 20.3 per cent. of the issued ordinary share
capital of the Company.
(2) As a result of his ownership and control of CMI and Continuity, Dirk Brouwer has voting control in respect of [46,328,944] Shares, representing [46.30] per cent. of the
issued share capital of the Company.
(3) [Xxxxxxxx].
(4) Certain investors in CMI continue to hold shares in CMI. The following table sets out the names of those CMI shareholders (other than CMIMC, which is controlled by
entities that are ultimately controlled by Dirk Brouwer) whose interests in CMI reflect an indirect beneficial ownership of more than 3 per cent. in the Company:
Name of CMI Shareholder
Nature of interest or rights concerned Number of Shares
Percentage of current
issued share capital
Stichting Pensioenfonds ABP Shares 5,824,950 5.8%
Gray Ghost Microfinance Funds, LLC Shares 4,375,641 4.4%
[Xxxxxxx] Shares [XX] [XX.X]%
[Xxxxxxx] Shares [XX] [XX.X]%
Notes:
[(5) Xxxxxxxx].
[(6) Xxxxxxxx].
4.3 During the Disclosure Period, neither the members of the Concert Party, nor the following Directors of the Concert Party, and
persons acting in concert with any member of the Concert Party have dealt in the following relevant securities, save Dirk Brouwer
has been granted options over Shares pursuant to the LTIP, an amount equal to 282,341 Shares.:
4.4 Save as disclosed in this document, as at the close of business on Latest Practicable Date,
(i) none of:
i. the Directors or their respective related parties;
ii. any person acting in concert with Company;
iii. the members of the Concert Party;
iv. the directors of any member of the Concert Party; or
v. any person acting in concert with any member of the Concert Party;
had an interest in, a right to subscribe in respect of, or any short position in relation to relevant securities;
(ii) none of the Company or the Directors had an interest in, a right to subscribe in respect of, or any short position in relation
to relevant securities of any member of the Concert Party;
(iii) none of the members of the Concert Party, directors of any member of the Concert Party or any persons acting in concert
with any member of the Concert Party have dealt in any relevant securities during the Disclosure Period;
(iv) none of the Company or any person acting in concert with Company has borrowed or lent any relevant securities (including
for these purposes any Financial Collateral Arrangements) during the Disclosure Period, save for any borrowed shares which
have been either on-lent or sold; and
PART VIII – ADDITIONAL INFORMATION CONTINUED
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AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
(v) none of the members of the Concert Party or persons acting in concert with any member of the Concert Party has borrowed
or lent any relevant securities (including for these purposes any Financial Collateral Arrangements) during the Disclosure
Period, save for any borrowed shares which have been either on-lent or sold.]
5 MIDDLE MARKET QUOTATIONS
Set out below are the closing middle-market quotations for the Shares, as derived from the Daily Official List of the London Stock
Exchange, for the first dealing day of each of the six months preceding the date of this document and for [XX] (being the last practicable
date prior to the publication of this document).
Date
Price per Share (pence)
1 December 2023 [XX]
2 January 2024 [XX]
1 February 2024 [XX]
1 March 2024 [XX]
3 April 2024 [XX]
1 May 2024 [XX]
[Xxxxxxxxxx] [XX]
6 SERVICE CONTRACTS AND LETTERS OF APPOINTMENT OF DIRECTORS
Other than Karin Kersten, none of the Directors’ service contracts or letters of appointment have been entered into or amended during
the period of six months prior to the date of this document The main terms on which the Directors are employed are set out below:
6.1 KARIN KERSTEN – CHIEF EXECUTIVE OFFICER
Ms Kersten is employed through a service agreement dated 15 June 2023. Her salary is EUR 375,000 and she was awarded 125,088
additional share options after the 2023 AGM. Ms Kersten’s service agreement is terminable by either party with six months’ notice,
or earlier upon conclusion of a termination agreement. The Company will consider making a payment under any such agreement on a
case-by-case basis, taking account of the contractual terms, the circumstances of the termination and any applicable duty to mitigate.
6.2 DIRK BROUWER – DEPUTY CHAIRMAN OF THE BOARD
Mr Brouwer is employed through an employment agreement dated 15 June 2023. His salary is USD 375,000. Mr Brouwer’s employment
agreement is terminable in accordance with Dutch Law. The Company shall observe a notice period of six months and Mr Brouwer will
observe a notice period of three months. The Company will consider making a payment under any such agreement on a case-by-case
basis, taking account of the contractual terms, the circumstances of the termination and any applicable duty to mitigate. In his role as
(i) Deputy Chairman of the Board and (ii) Special Adviser to the new CEO, the Executive Committee and the broader management team,
Mr Brouwer only receives a regular, annual salary for his services to the Company and no Board and Director fees or any other
emoluments.
6.3 GUY DAWSON – NON-EXECUTIVE DIRECTOR
Mr Dawson is the Non-Executive Chairman and a Non-Executive Director engaged through a letter of appointment dated 28 June 2018
and was appointed as Non-Executive Chairman on 1 January 2021. He is the Chairman of the Nomination Committee (and the
Independent Committee). His fee as a Non-Executive Director, and Non-Executive Chairman is GBP 75,000 per annum (including
a GBP 10,000 fee for chairing the Board and a GBP 10,000 fee for chairing the Nomination Committee) and his engagement with the
Company can be terminated with three months’ notice.
6.4 HANNY KEMNA – NON-EXECUTIVE DIRECTOR
Ms Kemna is a Non-Executive Director engaged through a letter of appointment dated 28 June 2018. Hanny is the chairperson of
the Remuneration Committee, and Audit and Risk Committees (and the Independent Committee). Her fee as a Non-Executive Director,
Chairperson of Remuneration Committee and Senior Independent Director is GBP 65,000 per annum (the fee of GBP 10,000 fee also
included the remuneration for acting as the Senior Independent
6.5 DR SALEHUDDIN AHMED – NON-EXECUTIVE DIRECTOR
Dr Ahmed is a Non-Executive Director engaged through a letter of appointment dated 7 December 2020. He is a member of the
Nomination and Audit and Risk Committees (and the Independent Committee). His fee as a Non-Executive Director is GBP 55,000
per annum and his engagement with the Company can be terminated with three months’ notice. His term expires on 7 December 2024
by virtue of the letter of extension dated 7 December 2023.
(1)
Note:
(1) This is the first AGM at which Mr Low will stand for election by the Company’s ordinary shareholders. Biography to be confirmed.
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NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
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6.6 CHRIS LOW – NON-EXECUTIVE DIRECTOR
Chris Low is a Non-Executive Director engaged through a letter of appointment dated 12 December 2022. His appointment took effect
on 1 February 2023. He is a member of the Remuneration, Audit and Risk and Independent Directors Committees. His fee as a Non-
Executive Director is GBP 65,000 per annum (including a GBP 10,000 fee for chairing the Audit and Risk Committee) and his
engagement with the Company can be terminated with three months’ notice.
7 MATERIAL CONTRACTS OF THE COMPANY
The following contracts have been entered into by Company or its subsidiaries otherwise than in the ordinary course of business since
[XX] (the date two years prior to the date of this document) and are or may be material:
[XX]
(1)
.
8 INCORPORATION BY REFERENCE
Paragraph 14 (Information Incorporated by Reference) of this Part VIII sets out which sections of such documents are incorporated into,
and form part of, this document and the location of references to such documents within this document.
Any person who has received this document may request a copy of such documents incorporated by reference. A copy of any such
documents or information incorporated by reference in this document will not be sent to such persons unless requested from the
Registrar, [Equiniti at Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA] or by telephone on 0371 384 2030 if calling from
within the United Kingdom or +44 (0)121 415 7047 if calling from outside the United Kingdom. If requested, copies will be provided,
free of charge, within two Business Days of request.
9 CONSENT
Stifel has given and not withdrawn its written consent to the issue of this document with the inclusion herein of the references
to its name in the form and context in which it appears.
10 OTHER INFORMATION
Save as disclosed in this document, no agreement, arrangement or understanding (including any compensation arrangement), exists
between the Directors, recent directors, Shareholders or recent shareholders of the Company having any connection with or
dependence upon the proposals set out in this document.
11 ARRANGEMENTS
Save as disclosed in this document, there is no agreement, arrangement or understanding whereby the beneficial ownership of any of
the Shares to be acquired by the Company pursuant to the Buyback Authority will be transferred to any other person. Such Shares will,
in accordance with the Companies Act, either be held in treasury up to the amounts permitted to be held in treasury by the Companies
Act or be cancelled and the issued share capital of the Company reduced by the nominal amount of those Shares so purchased.
12 SIGNIFICANT CHANGE
Save as disclosed in this document, the Directors are not aware of any significant change in the financial or trading position of the
Company since 31 December 2023, the date to which the latest audited accounts for Company were published.
13 DOCUMENTS AVAILABLE ON WEBSITE
Copies of the following documents will be available from the date of this document on Company’s website (at www.asa-international.
com) up to and including date of 2024 AGM and will be available for inspection during usual business hours on any Business Day at the
registered office of the Company from the date of this document up to the date of the 2023 AGM and at the place of the meeting for
15 minutes prior to the meeting and during the meeting:
13.1 the articles of association of the Company;
13.2 copies of the annual report and accounts of the Company for the financial year ended 31 December 2023 and 31 December 2022;
13.3 [the material contracts referred to in paragraph [7] of this Part VIII;] and
13.4 the written consent from Stifel referred to in paragraph 9 of this Part VIII.
PART VIII – ADDITIONAL INFORMATION CONTINUED
Note:
(1) ASAI to confirm if there are any material contracts entered into in the period two years prior to the date of this document. We are not aware of any such material contracts
at this time.
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NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
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14 INFORMATION INCORPORATED BY REFERENCE
The following table sets out financial information in respect of the Company as required by Rule 24.3(e) of the Takeover Code.
The documents referred to in the table, the contents of which have previously been announced through a Regulatory Information
Service, are incorporated into this document by reference pursuant to Rule 24.15 of the Takeover Code:
Name
Section Page reference in relevant document
2023 financial statements
(included in the Annual
Report) Independent auditor’s report [XX] to [XX]
Consolidated statement of profit or loss and other comprehensive income [XX]
Consolidated statement of financial position [XX]
Company statement of changes in equity [XX]
Consolidated statement of cash flows [XX]
Notes to the consolidated financial statements [XX] to [XX]
Statutory statement of profit or loss and other comprehensive income [XX]
Statutory statement of financial position [XX]
Statutory statement of changes in equity [XX]
Statutory statement of cash flows [XX]
Notes to the statutory financial statements [XX]
2022 financial statements
(included in the Annual
Report) Independent auditor’s report 99 to 105
Consolidated statement of profit or loss and other comprehensive income 106
Consolidated statement of financial position 107
Company statement of changes in equity 108
Consolidated statement of cash flows 109
Notes to the consolidated financial statements 110 to 163
Statutory statement of profit or loss and other comprehensive income 164
Statutory statement of financial position 165
Statutory statement of changes in equity 166
Statutory statement of cash flows 167
Notes to the statutory financial statements 168 to 170
The information is available in “read-only” format and for reviewing and downloading free of charge from the Company’s website
at www.asa-international.com.
A copy of any such documents or information incorporated by reference in this document will not be sent to such persons unless
requested from the Registrar, Equiniti, at Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA, United Kingdom or by
telephone on [XX]. If requested, copies will be provided, free of charge, within two Business Days of request.
NO INCORPORATION OF WEBSITE INFORMATION
Neither the content of the Company’s website, nor the content of any website accessible from hyperlinks on the Company’s website,
is incorporated into, or forms part of, this document.
26
NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
The following definitions apply throughout this document, unless the context otherwise requires:
2024 AGM the annual general meeting of the Company convened for 11:00 [a.m.] on 20 June 2024 at the
offices of [Cavendish, One Bartholomew Close, London, EC1A 7BL], and any adjournment
thereof, for the purpose of considering the matters set out in the Notice of AGM
Annual Report the annual report and accounts of the Company for the year ended 31 December 2023
ASA International or the Company ASA International Group plc, a public company registered in England & Wales (registered
number 11361159), whose registered office is at Highdown House, Yeoman Way, Worthing,
West Sussex, BN99 3HH
Business Day a day (other than Saturdays, Sundays and public holidays in the UK) on which banks are
normally open for business in the City of London
Buyback Authority the authority for the Directors to make market purchases of Shares granted by a special
resolution of shareholders as set out in resolution 16 of the Notice of AGM
Buyback Waiver the waiver granted by the Panel (subject to the passing of the Buyback Waiver Resolution) in
respect of any requirement of the members of the Concert Party to make a mandatory offer for
the entire issued share capital of the Company not already held by the members of the Concert
Party which might otherwise be imposed on the Concert Party under Rule 9 of the Takeover
Code as a result of buyback of Shares pursuant to the Buyback Authority, as more particularly
described in Part I of this document
Buyback Waiver Resolution the resolution to approve the Buyback Waiver set out in this document
CMI Catalyst Microfinance Investors, a company incorporated in Mauritius
CMIMC CMIMC, a company incorporated in Mauritius and controlled by entities ultimately controlled
by Dirk Brouwer
Continuity Catalyst Continuity Limited, a company incorporated in Mauritius
Companies Act the Companies Act 2006
Concert Party [Dirk Brouwer and the entities through which he indirectly holds his interests in the Company,
including CMIMC, CMI and Continuity (each of them being “a member of the Concert Party”),
which the Company considers, following discussions with the Panel, are presumed to be acting
in concert (as defined in, and for the purposes of, the Takeover Code), further details of which
are set out in Part VI of this document]
[(1)]
Directors or Board the board of directors of the Company or, where the context so requires, the directors of the
Company from time to time
Executive Directors the executive directors of the Company, as listed on [page 3] of this document
Form of Proxy the form of proxy accompanying this document for use by Shareholders in relation to the 2024
AGM
Financial Conduct Authority or FCA the Financial Conduct Authority acting in its capacity as the competent authority for the
purposes of Part VI of the UK Financial Services and Markets Act 2000
Group the Company and its subsidiary undertakings, and where the context permits, each of them
Independent Directors for the purposes of this document, and the decisions and recommendations contained herein,
the directors of the Company excluding Dirk Brouwer (being a member of the Concert Party)
PART IX – DEFINITIONS
Note:
[(1) Xxxxxxxxxxxxx].
27
NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
Independent Shareholders the Shareholders other than the Concert Party
Listing Rules the rules and regulations made by the Financial Conduct Authority under the Financial Services
and Markets Act 2000, and contained in the FCA’s publication of the same name
Latest Practicable Date [XX XXXXX] 2024, being the latest practicable date prior to the publication of this document
London Stock Exchange London Stock Exchange plc
LTIP the ASA International Long-Term Incentive Plan, adopted by the Company in 2018, as amended
in 2022
LTIP Awards options over Shares granted under the LTIP
LTIP Waiver the waiver granted by the Panel (subject to the passing of the LTIP Waiver Resolution) in
respect of any requirement of the Concert Party to make a mandatory offer for the entire
issued share capital of the Company not already held by the Concert Party which might
otherwise be imposed on the Concert Party under Rule 9 of the Takeover Code following the
exercise of the LTIP Awards by Dirk Brouwer, as more particularly described in Part I of this
document
LTIP Waiver Resolution the resolution to approve the LTIP Waiver set out in this document
Notice of AGM the notice of the 2024 AGM set out in this document
Official List the Official List maintained by the FCA
Panel the Panel on Takeovers and Mergers
Pounds sterling or £ pounds sterling, the lawful currency of the UK (and references to pence or p will be construed
accordingly)
Regulatory Information Service any of the services set out in Appendix I to the Listing Rules
Remuneration Committee the remuneration committee of the board of the Company
Shareholders holders of Shares from time to time
Shares the existing unconditionally allotted or issued and fully paid (or credited as fully paid) ordinary
shares of £0.01 each in the capital of the Company
Stifel Keefe, Bruyette & Woods (acting through Stifel Nicolaus Europe Limited)
Takeover Code the City Code on Takeovers and Mergers
United Kingdom or UK the United Kingdom of Great Britain and Northern Ireland
Waiver Resolutions the Buyback Waiver Resolution and the LTIP Waiver Resolution as set out in the Notice of
AGM
Waivers the Buyback Waiver and the LTIP Waiver
28
NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
29
NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS
NOTICE OF 2024 ANNUAL GENERAL MEETING ASA INTERNATIONAL GROUP PLC
AND EXPLANATORY CIRCULAR TO SHAREHOLDERS