Microfinance Institution “Amret” Annual Report
Annual Report 2013 2013 Key Figure
2013 in Million KHR 2012 in Million KHR 2011 in Million KHR Number of Borrowers 309,458 299,507 266,914 Operating Provinces 21 18 16 Operating Districts 143 133 112 Operating Villages 9,758 8,795 6,766 % of Woman Borrowers 80.1% 80.9% 82.5% Total Staff 2,911 2,425 1,693 KHR1,001,964 Million KHR 705,542 Million KHR 481,272 Million Total Assets (US$ 250,804 Thousand) (US$ 176,606 Thousand) (US$ 119,156 Thousand) KHR 814,112 Million KHR 594,579 Million KHR 399,065 Million Loan Portfolio1 (US$ 203,783 Thousand) (US$ 148,831 Thousand) (US$ 98,803 Thousand) KHR 174,951 Million KHR 137,244 Million KHR 111,801 Million Equity plus Quasi Equity2 (US$ 43,793 Thousand) (US$ 34,354 Thousand) (US$ 27,680 Thousand) Net Income / Average Total Assets 5.0% 4.9% 6.1% Net Income / Net Financial Income 27.7% 25.3% 29.3% Operational Self-Sufficiency3 135.8% 133% 139% Financial Self-Sufficiency4 129.3% 126% 132% KHR 152,165 Million KHR 115,193 Million KHR 83,718 Million Net Financial Income (US$ 38,089 Thousand) (US$ 28,834 Thousand) (US$ 20,727 Thousand) Salary / Net Financial Income 22.8% 24.1% 24.3% Borrowers per Credit Officer 274 302 332 KHR 617.61 Million KHR 4 90.67 M illion KHR 4 00.43 M illion Average Loans Portfolio Per Credit Officer (US$ 155 Thousand) (US$ 123 Thousand) (US$ 99 Thousand) Portfolio-at-Risk > 30 days5 0.07% 0.11% 0.07% KHR 1.02 Million KHR 0 .93 M illion KHR 0 .81 M illion Average Amount Per Group Loan (US$ 0.26 Thousand) (US$ 0.23 Thousand) (US$ 0.20 Thousand) KHR 6.17 Million KHR 4 .84 M illion KHR 3 .74 M illion Average Amount Per Individual Loan (US$ 1.54 Thousand) (US$ 1.21 Thousand) (US$ 0.93 Thousand) Exchange rate KHR 3,995 per US$ KHR 3,995 per US$ KHR 4,039 per US$
NotE:
1 Loan Portfolio: Gross loan outstanding. 2 Equity Plus Quasi Equity: Total equity includes subordinated debt. 3 Operational Self-Sufficiency: Measures how well an MFI covers its costs through operating revenues. Formula: Financial Income / (Financial expense + Operational expense + Loan loss provision) 4 Financial Self-Sufficiency: Measures how well an MFI can cover its cost, taking into account a number of adjustments to operating revenues and expense. The purpose of most of these adjustments is to model how well the MFI could cover its costs if its operations were unsubsidized and it was funding its expansion with commercial-cost liabilities. Formula: Financial Income/ (Financial expense + Operational expense + Loan loss provision + (Average Equity-Average Fixed Asset)*Inflation Rate 5 Portfolio-at-Risk > 30 days: (Portfolio at risk >30 days to 365 days (of overdue principle) + Restructure loan) / gross loan portfolio.
Annual Report 2013 B Microfinance Institution “Amret” Content
Vision And Mission 01
Milestones 02
Message from Our Chairperson 03
Shareholders 04
Board Of Directors 05
Notes From CEO 09
Management Team 11
Organizational Chart 16
Business Performance Review 18
Risk Management 26
Client Testimonials 31
Branch Network 32
Staff, Staff Development & International Visiting Program (IVP) 33
Social & Environmental Responsibility 36
Financial Statements For The Year Ended 42
Appendix: Notes On Compliance With The Central Bank’s Prakas 96
Contact Details 105
Annual Report 2013 Microfinance Institution “Amret” C Vision and Mission
VISION To be an outstanding financial institution that improves the living standards of the population and contributes to the economic and social development of Cambodia.
MISSION To provide a wide range of financial services for low income people as well as micro, small and medium enterprises - while at the same time achieving a high level of financial and social performance.
Annual Report 2013 01 Microfinance Institution “Amret” Milestones
Historical milestones of the evolution of Amret are presented below:
GRET, a French NGO, sets up an experimental project to deliver microcredit to the rural population of Cambodia. The first experi- 1991: mental phase (EXPE I) is launched, with a single financial product known as Solidarity Credit (SC). Initialization of a second experimentation phase (EXPE II). Solidarity Credit is modified under new procedures while an Individual 1995: Credit (IC) product is launched. Meanwhile, GRET plans to transform the project into a microfinance institution. 1996: Conception of the name Ennatien Moulethan Tchonnebat (EMT). End of EXPE I. All activities transfer to EXPE II. As EMT becomes operationally self-sufficient, a new organizational chart is de- 1998: signed that transfers management responsibilities from technical assistants to local staff. 1999: EMT borrows from commercial banks for the first time. EMT becomes a private limited company, “Ennatien Moulethan Tchonnebat Ltd.”, with a registered share capital of KHR 330 mil- 2000: lion from 2 shareholders of GRET and SIDI. 2001: EMT receives its MFI license from the National Bank of Cambodia. EMT legally admits two new shareholders, Proparco and La Fayette Participations and considers investing in a new Management 2002: Information System (MIS). EMT launches a Certificate Deposit (CD) product in two branches. EMT redesigns Individual Business Loans to meet market needs, and lowers the interest rate from 4% to between 3.5% and 3.0%, according to loan amounts. 2003: Conclusion of permanent expatriate technical support. I&P joins EMT as a new shareholder 2004: EMT is renamed as “Amret” on June 14, 2004. Amret rolls out a new MIS “Microbanker Windows Version”. Amret diversifies individual loans into (1) Business Loan, (2) Educational Loan, (3) Home Improvement Loan and (4) Household 2005: Consumption Loan. Amret introduces the front-office operations - the conventional banking operations whereby the borrowing clients come to institu- tional branches. 2006: Advans S.A becomes a shareholder. 2007: Botta - the staff investment company- becomes a shareholder. 2008: SIDI and I & P exit, but three new shareholders come in: Proparco, FMO and Oikocredit Amret obtained the license of deposit taking from public in January 2009 2009: By end of the year, all branches of Amret are ready to collect savings from the public. 1. Exit of Oikocredit, and Advans SA taking over its shares. 2012: 2. Go live of new Core Banking System (T24 MCB) and starting the roll out phase.
Annual Report 2013 Microfinance Institution “Amret” 02 Message from Our Chairperson
continuously good portfolio quality. These accomplishments resulted in enhanced profitability in 2013, with net income at the end of the year up 44.48% over 2012 figures. Moreover, Amret continued to introduce new products to better serve its target clientele. The wide range of credit products on offer ranges from solidarity loans for low-income rural populations to business loans for SMEs; the institution offers credit for agribusinesses and commercial farmers as well as individual short- and medium-term loans for microenterprises. On the deposits side, Amret offers current accounts, savings accounts and term deposits, enabling its clients to optimize their liquidity management. In addition, the institution has continued to develop a number of financial services including bill payment and cash collection services. Mobile banking is slated for introduction in 2014. Amret is progressively improving its organization and practices in preparation for its transformation into a bank. The MFI is especially focused on strengthening its internal audit and risk management, and developing dynamic human resources policies to become a lead employer. In 2014, it will pursue its mission to Amret’s operational and financial performance in 2013 was become a market frontrunner in serving MSMEs and the low- and excellent, and this success was complemented by the further middle-income inhabitants of Cambodia with a focus on rural evolution and consolidation of the institution. The MFI continued areas, agriculture and district and provincial cities. its mission to serve its clientele responsibly and sustainably, In closing, on behalf of the Board of Directors, I would like to increasing its outreach to 116 branches and more than 335,000 thank Amret’s management and staff; without their commitment clients by the end of December 2013. and loyalty, the institution would not have been able to succeed The loan portfolio recorded strong but cautious growth over and progress in 2013. the year, with a 37% increase in the outstanding portfolio and Dr. Claude FALGoN, Chairperson
Annual Report 2013 03 Microfinance Institution “Amret” Shareholders
ADvANs sA siCAR (Advans SA) is a Venture Capital Investment GREt (Groupe de Recherche et d’Echanges Technologiques) is Company with registered office in Luxembourg, whose mission is to a non-profit private organization based in France. Its objective build a network of microfinance institutions (MFIs) in developing is to contribute to sustainable and fair development, and to the and emerging countries. Advans SA’s investment strategy consists alleviation of poverty and structural inequalities. GRET supports in setting up green field MFIs and, as in the case of Amret, invest social and economic development projects in about 30 developing equity in existing MFIs, provided such MFIs share Advans SA countries. vision and understand the strategic and operational benefits of joining an international network. LFP (La Fayette Participations) is an investment company registered in France as a “Société Anonyme” and created by BottA, which is a staff company, is registered as a private Horus for the purpose of subscribing to shares in microfinance limited company and under Cambodian law; its registered office institutions. In creating LFP, Horus aimed to combine its technical is in Phnom Penh, Cambodia. The company was created to invest expertise with shareholder status. The experience acquired by in Amret only, and approved as a new shareholder by current Horus in setting up LFP laid the corner stone of the creation of shareholders due to attracting a long-term commitment from staff. Advans. Even if it is a small percentage, it is a long-term investment. Proparco (Société de Promotion et de Participation pour la FMo (Nederlandse Financierings-Maatschappij voor Coopération Economique) is incorporated under French law; its Ontwikkelingslanden N.V.) is the entrepreneurial development registered office is in Paris, France. Its objective is to promote bank of The Netherlands, created by a deed of incorporation the development of private sectors and, in a general manner, of in 1970. Its registered office is in The Hague, Netherlands. Its a competitive productive sector in developing countries, and to objective is to contribute to the development of business in execute all activities of a financial company. developing countries in the interest of long term and sustainable economic and social progress in conformity with the intention of the governments of such countries.
The distribution of shares is as follows: Face Value KHR 1,360,000/ Shareholder Number of Shares share (KHR’000) Share Capital
Advans SA 3,717 5,055,120 44.42% Botta 181 246,160 2.16%
FMO 1,056 1,436,160 12.62%
GRET 1,623 2,207,280 19.39%
LFP 340 462,400 4.06%
Proparco 1,450 1,972,000 17.32%
Total 8,367 11,379,120 100%
Annual Report 2013 Microfinance Institution “Amret” 04 Board of Directors
Dr. Claude FALGON, Chairman
French, born in 1947.
Appointed to the Board in August 2001 and became Chair- man on 22 February 2005. He obtained a PhD in economics from Michigan State University, USA, a post-doctorate in Man- agement Science, ICG Paris, France and an MSc in Agriculture Economics, INA Paris, France. Claude Falgon is the president of Horus Development Finance, a consulting firm specialized in microfinance and SME finance. He is also executive director of Advans S.A. SICAR.
Mr. CHEA Phalarin, Board Member
Cambodian, born in 1967.
Appointed to the Board on 10 July 2000, he obtained his BBA in 1991 from Econom- ics Science Institute in Phnom Penh, and his MBA in 2002 from National University of Management (NUM) & UTARA University of Malaysia. He worked for the Cambo- dian government from 1991 to 1995 at the Ministry of Agriculture, since when he has worked for Amret as a Credit Officer, General Trainer. He became the Chief Executive Officer at the end of 1997.
Annual Report 2013 05 Microfinance Institution “Amret” Board of Directors
Mr. Guillaume LEPOUTRE, Board Member
French, born in 1968.
Appointed to the Board on 22 March 2011, he obtained his Master’s degree in Fi- nance from the University of Aix-Marseille and an MBA in Finance from the University of Paris IX Dauphine. After three year in the HSBC Group as a credit analyst, he joined the Credit Agricole Group in 1996. He worked in the factoring subsidiary of Crédit Ag- ricole as Operation Manager until 2004. After consulting assignments in Madagas- car, he joined the Alstom Group as international cash collection manager. In 2010, he joined Gret in the position of Microfinance Program Manager.
Ms. Amanda HANNAN, Board Member
British, born in 1973.
Appointed to the Board on 29 June 2012, she holds a degree in Mathematics ac- quired in 1994, and an MSC in 1995 from Manchester University, United Kingdom. A qualified chartered accountant, she has more than 18 years experience in finance and corporate finance. From 2001 to 2006, she worked as Corporate Finance Man- ager for Grant Thornton in the UK and France. In 2006 she joined Horus Development Finance as Investment Officer, became Head of Investment Unit in 2011 and Deputy CEO in April 2014.
Mr. Angus POSTON, Board Member
British, born in 1971.
Appointed to the Board on 25 December 2012, he holds an MA in Development Eco- nomics and Management from Manchester University, UK. From 1997 to 2007 he worked as a consultant to banks, micro-finance institutions and social investors in Asia, the UK and Central Europe. From 2007 to 2009 he worked for Barclays Bank in the UK. Since 2009 he has been a Principal of Bridge, a microfinance support company focused on the Philippines.
Annual Report 2013 Microfinance Institution “Amret” 06 Board of Directors (Cont.)
Mr. Jean-Claude LEULLIER, Board Member.
French, born in 1947.
Appointed to the Board on 25 December 2012, he received a degree in Engineering in 1970, Diploma of Statistics from Institute de Statistiques de l’Université de Paris in 1972, and PhD in Geography, Paris VII University in 1973. He joined missions for agricultural and industrial development projects all over the world from 1974 to 1985. From 1985 to 1997 he worked for Groupe SCIC as Chief Financial Officer. From 1997 to 2005, he worked as a Chairman and Chief Executive Officer of SCIC Patrimoine, and since 2005 he has worked as Senior Advisor in fund raising and enjoyed the position of Managing Director at Lyn Capital and Partner at Catalice.
Mr. KAY Lot, Board Member.
Cambodian, born in 1970.
Appointed to the Board on 25 December 2012, he graduated with a Bachelor of Sci- ence in Business Administration from Kennedy Western University, Indonesia, in 1997. From 1999 to 2003, he was Head of Country Finance and later promoted to Head of Service Delivery at Standard Chartered Bank in Phnom Penh, Cambodia. From 2003 to 2008, Kay Lot joined CamGSM Co., Ltd. (Mobitel) as Chief Financial Officer for the telecommunications and television businesses, during which he achieved Sarbanes- Oxley compliance and raised significant funding for the expansion of the company. From 2009 to 2012, he was promoted to be a Chief Operating Officer at the same company. In his professional career, Kay Lot was recipient of two significant awards for exceptional leadership and performances from both multi-national companies he worked for.
Annual Report 2013 07 Microfinance Institution “Amret” Board of Directors (Cont.)
Provincial Office Standard Building of Microfinance Institution “Amret” Notes from the CEO
2013 is thought to have been a good year for economic development in Cambodia due to a conducive overall economic environment and adequate rainfall, despite some challenges due to a large flood in the area along the Mekong River and Tonle Sap and public concerns around the general election in July 2013 that had a short impact on savings collection and the loan portfolio. In line with positive economic growth, microfinance has played an important contributing role in this economic and social development. With the satisfactory implementation of a Credit Bureau and the strengthening of responsible lending, stakeholders’ concerns regarding over-indebtedness have lessened. Thanks to generally favorable economic conditions, average loan portfolio growth in the sector was 48.5% among existing MFIs (excluding Acleda Bank) during the year. Responding to changes in the sector, Amret increased its outstanding loans by 36.92% over the previous year’s portfolio—an increase from KHR 594,579 million (US$ 148.83 million) to KHR 814,112 million (US$ 203.78 million) with 30-day PAR at 0.07%. We also maintained a good market share in the number of loan clients with 309,458 clients, or 17% of the clientele of the 38 licensed MFIs and Acleda Bank in our 21 operating provinces. Saving collection rose from KHR 333,538 million (US$ 83.49 million) in 2012 to KHR 376,989 million (US$ 94.37% million) in 2013. This slight increase in savings in 2013 is due to the impact of stronger competition over savings collection from the main competitors based on their high pricing and aggressive marketing campaigns and a temporary drop caused by the general election We not only offer savings and loan products to our clients but in July 2013. Despite positive growth, strong competition is still we have also implemented the Client Protection Principles (CPP) a growing concern and increasing rapidly as each MFI had rapid to be integrated in our policies and procedures following the growth rates and several new MFIs and banks made an entrance standards of the Smart Campaign and the requirements of the during the year (in all, there were 38 licensed MFIs by Dec 2013). Central Bank. Additionally, we developed and implemented a With the lessons learned over the last few years, MFI stakeholders Social Performance Management (SPM) action plan supported by have paid attention to the negative impact (2008-2009) that could Oikocredit. Practically, we integrated the program in our strategic be repeated due to the large amount of credit offered and the plan and launched non-financial services such as a collaboration potential impact of a world economic crisis. with agricultural services to provide agricultural skills training to
Annual Report 2013 09 Microfinance Institution “Amret” Notes from the CEO
villagers and educated staff and clients on how to act and share (AML) policy to avoid black market money circulation; anti- concern for the natural environment to ensure sustainable growth terrorist financing measures, a business continuity planning policy, in line with our Vision and Mission. brand building image efforts and a social performance policy are being carefully implemented along with the adoption of a core Due to the good macro-economic environment, Amret’s growth banking system (CBS), Temenos T24, which is slated for complete not only built on the portfolio of current products but also on roll-out in early 2014. a diversification into new product lines. We rolled out our SME loan product and are doing pilot tests of our new agricultural Regarding creditability and transparency, Amret was regularly loan product and testing processes to increase the capacity of our inspected by the Central Bank, audited by an external auditor, delivery channels to our target customers through information PriceWaterhouseCooper (PWC), and was rated on its financial technology thanks to a World Bank grant of US$ 730 thousand performance by Microfinanza, an Italian rating company for the year 2013-2014. recognized by CGAP, in November 2013. Microfinanza gave it a rating of A-, specifying that it has “strong capacity to meet its In line with its strong portfolio growth, Amret improved its financial obligations, very good operations, stable even if it could organizational structure for governance in terms of control, be affected by major internal and external events.” support and decision making. Related to this change, we (1) re- enforced our adjusted organizational structure, (2) re-enforced With the aforementioned achievements, transparency and a staff capacity building and internal communication by our Human forward-looking environment, Amret will expand cautiously in Resources Department, and (3) developed other human resources the coming years. Accompanied by ambitious objectives, we are projects to maintain staff motivation and long-term commitment. challenging ourselves to mobilize savings, especially from small depositors in remote areas, diversify other financial services in With good performance throughout the year, we were profitable existing and new operating areas, and maintain good portfolio with a gain of KHR 42,075 million (US$ 10.53 million), up 44.48% quality in the years to come. However, we are optimistic that we over 2012 (KHR 29,121 million, or approximately US$ 7.29 will achieve and overcome these challenges thanks to our regularly million), and a 5.0% RoAA and a 26.8% RoAE. updated and adaptable strategies and the strong commitment of Due to faster demand in loan portfolio growth in US$ than in our staff and managers centered around the Board of Directors. KHR, there was less pressure to raise funds in the local currency Finally, we would like to sincerely thank all customers, creditors, because we were able to raise funds in KHR directly from some suppliers, donors, local authorities, governmental institutions, lenders while the percentage of savings in KHR also increased. especially the Central Bank (NBC) and Ministry of Economy However, Amret still needs contingency loans for a few million and Finance, staff and management, the Board of Directors, and US$ in order to respond to urgent needs as our savings have other stakeholders who have supported us so far in achieving our increased remarkably. Positively, we have noted that there are outstanding goals. some local and international banks willing to lend to us directly via unsecured loans for contingency funds, and this seems to be an upward trend. Chea Phalarin, In addition to growth, we implemented an anti-money laundering Chief Executive Officer
Annual Report 2013 Microfinance Institution “Amret” 10 Management Team
Mr. CHEA Phalarin, Chief Executive Officer Cambodian, born in 1967. He obtained his BBA in 1991 at Economics Science Mr. Dos Dinn, Deputy Chief Executive Officer Institute in Phnom Penh, and his MBA in 2002 at Na- Cambodian, born in 1974. tional University of Management (NUM) & UTARA He obtained a Bachelor of Science in Agriculture in University of Malaysia. He worked for the Cambodian 1996 at Royal University of Agriculture, and an MBA government from 1991 to 1995 at the Ministry of Ag- in 2001 at National University of Management (NUM) riculture, since when he has worked for Amret as a & UTARA University of Malaysia. He was recruited General Trainer. He became the Chief Executive Of- in 1996 to be the Provincial Supervisor in Kandal, and ficer at the end of 1997. then transferred to thae Marketing Unit in 1998 and given the key position of Operations Manager in Oc- tober 1999, he was promoted to Chief of Operations Officer in November 2008. And in October 2011, he was promoted to Deputy Chief Executive Officer.
Annual Report 2013 11 Microfinance Institution “Amret” Management Team
Mr. PHAt Reatana, Head of Risk Management and Compliance Cambodian, born in 1975. He graduated a Bachelor of Business Administration in field of Accounting at National Uni- versity of Management and obtained a Master of Business Administration (MBA) at Charles Stuart University in Australia in field of Finance. He has worked in Amret since May 1997, initially as Internal Auditor, and was promoted to Head of Internal Audit in May 1999. In January 2010, he was appointed to Head of Risk Management and Compliance to set up the risk management function.
Ms. LiM sopha, Head of Human Resources Cambodian, born in 1975. She holds a Bachelor of Business Administration and also obtained her MBA at Charles Stuart University in Australia. She joined Amret in 1997 and was subsequently promoted to Provincial Supervisor and then Chief Accountant. She was promoted to the position of Head of Finance in August 2003. In April 2012, she was transferred to hold the position of Head of Human Resources.
Ms. HENG Sotheavy, Head of Marketing
Cambodian, born in 1980. She obtained a Bachelor of Marketing from NIM in 2003 and a Bachelor of English from BBU in 2009. Before joining Amret, she got many years’ experienced working with various NGOs and INGOs. From 2011, she has worked for Amret as Head of Marketing
Annual Report 2013 Microfinance Institution “Amret” 12 Management Team (Cont.)
Mr. tEANG sreng, Head of training Cambodian, born in 1978. He holds one master degree and two Bachelor’s degrees. Prior to that, he worked with privates companies and NGOs for as Trainer for three years, one year as Account Executive and three years as Service Station Manager. He started with Amret in 2007 and was later promoted to the position of Head of Commercial Training in May 2011.
Mr. CHHENG Yanith, Head of Credit Cambodian, born in 1981. He obtained a Bachelor of Science in Economics majoring in Finance and Banking from Insti- tute of Technology and Management (currently, University of Puthisastra) in 2004. In 2008, He obtained a Master of Business Administration from Royal University of Law and Economics (RULE). Yanith has over than 9 years of experience in microfinance institutions, and has spe- cialized in credit product, methodology, training and coaching of credit officer and managers, and project management. He joined working with AMRET MFI in mid May 2007 as Senior Credit Controller, was promoted to be an Internal Control Unit Manager in 2009, and Deputy Head of Risk and Credit in 2011.
Mr. ohm sareth, Head of Finance Cambodian, born in 1978. He joined Amret Microfinance Institution in 2010 and has been promoted to Head of Finance in 2013. He was a Senior Auditor at PriceWater-HouseCooper, Cambodia Ltd from 2006 to 2010 after being employed in various sectors in various capacities since 1997. He is currently pursuing an ACCA qualification and has successfully passed 11 ACCA papers. He obtained a B.A in Accounting in 2006 and a Diploma in the Intensive English Program from Paññāsāstra University of Cambodia.
Annual Report 2013 13 Microfinance Institution “Amret” Management Team (Cont.)
Mr. tAN Youhay, Head of operations Cambodian, born in 1970. He graduated from Ukraine with a Master Degree of Science in Economics in 1997. In 2000, he started working for Amret as Assistant Provincial Supervisor Kandal province. At the end of 2001, he was promoted to Provincial Supervisor of Kompot Province. In early 2010, he was promoted to Head of Operations.
MR. PHANG Polyna, Head of Provincial Office (Phnom Penh) Cambodian, born in 1972 He obtained a Bachelor of Science in Agriculture in 1995 at Royal University of Agricul- ture, and an MBA in 2008 at National University of Management (NUM). He was recruited in January 1996 to be a General Credit Agent in Kandal province, and then transferred to the Audit in July 1996. He was promoted to the position of Provincial Manager in July 1999, and given the key position of Head of Provincial Office in May 2011.
Mr. seng Hor, Head of Planning and Branch Organization Cambodian, born in 1979. He obtained MBA in 2008 at Norton University. He was recruited in 2002 as Deputy Provincial Manager of Kampot. In December 2012 he was promoted to be Head of Planning and Branch Organization.
Annual Report 2013 Microfinance Institution “Amret” 14 Management Team (Cont.)
Mr. AssiMAKoPoULos Panos, Cio Greek, born in 1965. Panos joined Amret in 2013. He brings along 20+ years on international experience in Informa- tion Technology focusing in the Financial Services Industry. He has held Senior Management and Director Roles in USA and Europe and has directed numerous Core Banking System implementa- tions for various Banks. Panos holds a MSc in Computer Information Systems from New Jersey Institute of Technology.
Mr. LoN Leang Eng, Head of Treasury Secretariat Cambodian, born in 1979. He obtained a Master of Finance from National University of Management in 2008 and also obtained a Bachelor of Accounting from National Institute of Management in 2002. He was recruited as Treasury Unit Manager in 2007, promoted to Deputy Head of Finance in Nov 2011, and transferred to be Head of Treasury Secretariat since December 2012. Prior to his work with Amret, he had more than 7 years’ experience of accounting and financial careers with some local and international companies.
Mr. KiN Nara, Head of Administration Affairs Secretariat Cambodian, born in 1980. He graduated from Build Bright University with a Bachelor of Management and a Master Degree of Finance and Banking. He started working in 2001 with tourism industry. In 2005, he started working for Amret as Administration Manager, and he was promoted to Deputy Head of HR then Head of Administration Affairs Secretariat in 2012.
Annual Report 2013 15 Microfinance Institution “Amret” Organizational Chart
Shareholders
BOD
CEO
Internal Audit Department DCEO
Risk management & compliance Department Executive Committee
Support Division Business Development Sales Division Division
Human Resources Marketing Head of Department Department Provincial Office
Finance Credit Head of Department Department Provincial Office
Treasury Financial Services Head of Secretariat Department Provincial Office
Committee Administration Commercial Training Head of Management Affaires Secretariat Department Provincial Office
IT (including CBS) Planning and ...... Department Branch OrganizationDepartment
Annual Report 2013 Microfinance Institution “Amret” 16 Activities of Amret’s employees meeting clients (Kien Svay district, Kandal province) Business Performance Review
1. Cambodian Economic Performance The Cambodian economy remains robust despite the challenging Agricultural product exports continued to increase substantially global economic environment, recent flood and instability after in 2013, especially rice. Despite flooding during the rainy season, the election period. The economic growth rate was 7.6% in 2013, rice production increased. The agricultural sector grew by 4.2% driven by strong and sustained agriculture sector growth, resilient in 2013. Despite sustained agricultural growth, the real growth exports, a rebound in construction activity, a robust tourism sector, was largely influenced by the garment, construction and tourism and the development of the banking sector. sectors. Garment exports continued to see impressive expansion in the US and EU markets despite the global slowdown thanks Inflation rose at a manageable pace of 3% in 2013, thanks to a to the relaxing of the EU’s rule of origin on preferential tariffs slight increase in food and gasoline prices. A stable exchange rate for less developed countries’ export to EU markets. Investment also contributed to Cambodia’s steady economic growth in 2013. approval in construction rose quickly, mainly for housing and The Khmer riel appreciated, reaching around 4,029 per US dollar public infrastructure construction projects. The expansion of the during 2013, triggered by the USA’s continuous macroeconomic construction and garment sectors led to a 9.3% growth in industry stimulus policy during the year. Alongside the uncertainty after in 2013. Tourist arrivals increased remarkably, which allowed the the national elections in July, credit to the private sector continued trade, transportation, hotel and restaurant sub-sectors continued its significant growth while banks and MFIs kept entering the growth and contributed to real growth in 2013. Cambodian market. The development of the banking sector was reflected in increasing public confidence in the sector and in private Despite robust growth, the economic outlook is subject to external sector investment, which contributed strongly to the growth of the downside risks due to slower growth in China and prolonged service sector and thereby of the domestic economy. At the same sluggish growth in the United States and the European Union, time, competition among banks helped to limit the impact of the which may affect Cambodia’s export industry and Foreign US$ interest rate, improved efficiency and incited local investors’ Direct Investment (FDI). Positively, improving electricity and interest in the domestic economy. This development was greatly rural infrastructures as well as more diversified Foreign Direct favorable to the small and medium enterprise industry, which is Investment (FDI) and a renewed reform momentum will mitigate in the process of developing in advance of the Association of external risk and provide a further boost to growth. Hence, the Southeast Asian Nations (ASEAN) economic integration in 2015. Cambodian economy is predicted to record growth of 7% in 2014. The GDP per capita was US$ 1,036 in 2013 and is projected to further increase along with continuous economic growth.
Annual Report 2013 Microfinance Institution “Amret” 18 Business Performance Review (Cont.)
Key Economic Indicators
Key Economic Indicators 2014 (f) 2013 2012 2011 2010
Growth and Consumer Prices* GDP Growth (% change, yoy) 7.2 7.6 7.3 7.1 6.0 Nominal GDP (US$ million) 17,214 15,191 14,231 12,937 11,634 GDP per Capita (US$) 1,080 1,036 990 911 830 Consumer Price Index (% change, yoy) 6.0 3.0 2.9 5.5 3.9
Trade and Investment* Export (US$ million) 7,714 6,909 5,583 5,219 3,884 Import (US$ million) 10,350 9,001 8,402 6,710 5,466 Foreign Direct Investment (US$ million) 1,626.8 1,221 1,410 873 762
Public Sector* Government Revenue (% of GDP) 14.5 14.6 13.7 13.2 13.1 Government Expenses (% of GDP) 20 21.71 19 20.7 21.3
Financial Market** Credit to Private Sector (% change, yoy) N/A 25 35.4 33.5 31 Deposit (% change, yoy) N/A 12.5 26.2 20.4 27 Credit by MFI (% change, yoy) N/A 48 38 51 43 Exchange Rate (KHR/US$, eop) N/A 3,995 3,995 4,039 4,050
e= estimation f= forecast Source: * Data in 2010 to 2013: Ministry of Economic and Financial while Data in 2014: World Bank Update Report (October 2013) ** National Bank of Cambodia (February 2013) & Cambodia Microfinance Association (December 2013)
Annual Report 2013 19 Microfinance Institution “Amret” Business Performance Review (Cont.)
2- Financial Sector Developments As the Cambodia economy continued to grow in 2013, the financial The financial sector remains stable and continues to develop to sector also recorded healthy growth. By the end of the year, there provide funding to low-income people, SMEs and corporations were 35 commercial banks, 9 specialized banks, 38 MFIs (7 of in the productive sectors of the economy, ultimately contributing which are MDIs) and 6 representative offices. to the economic growth of the country. Moreover, going forward, the National Bank will continue to implement its policies prudently According to the National Bank of Cambodia, as of 2013 the total in order to achieve its mission and contribute to the economic assets of commercial banks increased to 82% of GDP or a rise of development and prosperity of the country. 13.7% above 2012, while total assets of MFIs increased by 47.85% above 2012 (from about US$ 962 in 2012) of which loan portfolios The financial sector, and especially the MFI sector, has enjoyed increased by 43.6% and, during the same period, customer deposits healthy growth and admirable profitability during the year (based increased by 60.2% with total depositors numbering 820,160. The on the information shared by the six main MFIs). The sector will non-performing loan rate was only 2.5% for banks and financial continue to grow and prosper in the years ahead in line with the institutions and only 0.07% for MFIs in 2013. economic development and prosperity of the country.
Source: Annual Report 2013 of the National Bank of Cambodia
Activities of Amret’s clients selling souvenirs (Banteay Srey district, Siem Reap province)
Annual Report 2013 Microfinance Institution “Amret” 20 Business Performance Review (Cont.)
3. Lending performance: In addition, as of 2013, loans in the Thai Baht (THB) currency are available from Amret. Up to end of 2013, the credit products that Amret offers to serve its customers are solidarity credit (SC) and individual credit (IC: Loan portfolio: business, consumption, home improvement, bio-digester, office Compared to last year, Amret’s loan portfolio grew by 37%, and construction, SME, AGRIFIN and staff loans). about 93% of this growth came from individual loans thanks to The SME loan for small and medium enterprises is a new product a favorable economic environment, network expansion and the created in 2012 with pilot testing initiated in June of that year. This work of our staff. product was successfully rolled out in 2013. In addition, Amret has Regardless of this growth, Amret maintained good loan portfolio launched another product known as AGRIFIN; roll-out is slated quality with a PAR30 of less than 0.07%. This was a reflection of for 2014. AGRIFIN is a credit product most suitable for farmers our commitment to fully implement the policies, procedures and to apply for working capital or investment purpose to expand the guidelines of the Credit Bureau of Cambodia (CBC)—a key factor existing agricultural activities. that not only prevents clients from falling into indebtedness but also prevents Amret from having problems with loan clients.
(Loan outstanding) All value amounts are in million US$ Change in 2013 December December December in Amt. in Per. 2013 2012 2011 Key Indicators total Loan Portfolio 54.95 37% 203.78 148.83 98.80 Loan Portfolio sC total 3.77 7% 54.45 50.68 - Loan Portfolio SC in Riels 3.77 7% 54.44 50.68 41.07 Loan Portfolio SC in Baht 0.00 0.00 0.00 - - Loan Portfolio iC total 51.18 52% 149.34 98.15 57.73 Loan Portfolio iCBo total 18.24 41% 63.20 44.96 29.15 Loan Portfolio ICBO in Riel 1.00 11% 9.85 8.85 7.33 Loan Portfolio ICBO in US$ 17.23 48% 53.34 36.11 21.82 Loan Portfolio ICBO in Baht 0.01 0.01 0.01 - - Loan Portfolio iCFo total 33.25 64% 85.00 51.75 27.86 Loan Portfolio ICFO in Riel 0.33 11% 3.29 2.96 1.65 Loan Portfolio ICFO in US$ 32.91 67% 81.70 48.79 26.20 Loan Bio digester total (0.37) -69% 0.17 0.54 0.70 Loan Bio digester in Riel - - - - - Loan Bio digester in US$ (0.37) -69% 0.17 0.54 0.70 Loan staff total 0.07 8% 0.97 0.90 0.02 Loan to Staff in Riel - 0.00 - - 0.00 Loan to Staff in US$ 0.07 8% 0.97 0.90 0.02
Annual Report 2013 21 Microfinance Institution “Amret” Business Performance Review (Cont.)
0.48% 0.08% December 2013 26.72% 41.71% Portfolio SC Loan Portfolio ICBO in Total 31.01% Loan Portfolio ICFO in Total Loan Bio digester Total Loan to Staff Total
0.61% 0.36% December 2012
34.05% Portfolio SC 34.77% Loan Portfolio ICBO in Total 30.21% Loan Portfolio ICFO in Total Loan Bio digester Total Loan to Staff Total
Activities of Amret’s employees meeting clients (Saang district, Kandal province)
Annual Report 2013 Microfinance Institution “Amret” 22 Business Performance Review (Cont.)
Outreach As the figure below shows, in 2013, our total number of clients grew by 3% (or 9,951 clients). This growth came from individual credit (15,657 clients) while the number of solidarity credit clients dropped (5,706 clients). This drop in SC clients was due to the fact that some of our clients’ businesses improved so that they needed larger loans and therefore moved from SC to IC products.
Change in 2013 December December December in Amt. in Per. 2013 2012 2011 KEY iNDiCAtoRs total Number of Borrowers 9,951 3% 309,458 299,507 266,914 Number of SC Borrowers (5,706) -3% 212,705 218,411 204,599 Total Number of IC Borrowers 15,657 19% 96,753 81,096 62,315 Number of ICBO Borrowers 8,794 17% 59,722 50,928 41,096 Number of ICFO Borrowers 7,809 28% 35,928 28,119 19,421 Number of Bio digester Borrowers (1,083) -65% 594 1,677 1,782 Number of Staff Loan Borrowers 356 37% 509 372 16
0.19% 0.16% December 2013 11.61% Number of SC Borrowers 19.30% Number of ICBO Borrowers 68.73% Number of ICFO Borrowers Number of Bio Digester Borrowers Number of staff loan Borrowers
0.12% 0.56% December 2012 9.39% 17.00% Number of SC Borrowers 72.92% Number of ICBO Borrowers Number of ICFO Borrowers Number of Bio Digester Borrowers Number of staff loan Borrowers
Annual Report 2013 23 Microfinance Institution “Amret” Business Performance Review (Cont.)
4. Savings Mobilization 5. Inter-Branch Money Transfers (local money transfers) Amret has fully and successfully launched three types of deposit Since the launch of Inter-Branch Money Transfers (IMTs) in 2010, products: the Happy Account, Goal Account, and Wealthy this service has provided more flexibility to our customers and Account. From year to year, Amret is well-known and trusted by encourages them to conduct their transfer transactions at Amret. the public thanks to its good customer service and professional As the result, there were about 46,811 transactions in 12 months, customer relationship. As a result, by 2013, Amret collected with a growth rate of 14% bringing the transferred amount within deposits of KHR 376,989 million (about US$ 94.37 million), with Amret to 85,996 million riels. a growth rate of 13% over figures for the same period last year. The number of customer accounts also grew by 18%, reaching Inter-Branch Money Transfer Performance Trend 130,285 accounts, allowing Amret to maintain its position among MFIs in terms of deposit collection. Transfer Transaction However, Amret is not complacent about its current success and is continuing to strengthen its customer service and relationship Balance (Million KHR) 85,996 quality to provide good customer experience.
62,335
Deposit Performance Trend
Balance (in thousand US$) 46,811 40,913 Accounts 19,318 130,285
110,558 12,523
2011 2012 2013
94,365 6. Other Financial Products 83,489 41,217 Amret has been continuing and developing various new financial services such as the bill payment/cash collection service in response to its customers’ needs. The bill payment/cash collection service is 42,108 a financial tool for bill settlement between suppliers and customers that offers efficient and time-effective cash management. Amret
2011 2012 2013 is constantly developing its products to meet customer demand and be able to help its clients make transfer transactions and bill payments more rapidly.
Annual Report 2013 Microfinance Institution “Amret” 24 Activities of Amret’s clients collecting fish products (Puok district, Siem Reap province) Risk Management
Risk Management Performance Risk management plays a very important role in improving the ensure that a strong culture of internal control and low quality of Amret’s risk management system and in supporting the tolerance for risk is built and communicated to all staff. attainment of its corporate goals by focusing on two aspects— 4. internal Audit consists of the control activities performed protecting capital and optimizing the relationship between risks and implemented by the Internal Audit Department to and returns. evaluate permanent control and report to the Board of To ensure that the expansion of its business operations and Directors independently. activities in this dynamic and evolving environment remains within Risk Management Structure risk tolerance levels and fully compliant with applicable laws and regulations, both internal and external, Amret has implemented Amret has implemented an Integrated Enterprise-Wide Risk an integrated risk management program throughout the entire Management Framework to monitor and control the risks that organization called the Enterprise-Wide Risk Management accompany the organization’s business operations and activities. Program. In doing so, Amret established four risk management committees Risk management within Amret is an independent process with a under the oversight of the Risk Oversight Committee, namely the business function and an audit function. These functions are active Strategic Risk Committee, the Asset and Liability Committee, the in risk management at different levels of the organization. Credit Risk Committee and the Operational Risk Committee. Overview Of Risk Management Systems 1. Risk Oversight Management/Committee Amret implemented its Risk Management System based on the The Risk Oversight Committee’s mission is to oversee all concept of four main lines of control, namely: types of risks that can occur internally and externally in Amret’s business operations and activities to ensure that consists of the control activities 1. operational Control practices and procedures are effective for risk identification directly performed and implemented by operators at all and management and in full compliance with the applicable levels of the organization to ensure that outcomes are in laws and regulations. accordance with the policies and procedures developed. Prior to each meeting of the Board of Directors, the Risk consists of the control activities 2. Management Control Oversight Committee (ROC) holds a meeting to further performed and implemented by line management staff discuss and review the adequacy and completeness of the not directly involved in daily operations to ensure that the risks identified by each committee. operators perform their tasks and duties in accordance with the policies and procedures in place. During the year 2013, the Risk Oversight Committee reviewed and approved all reports from each risk management consists of the control activities 3. Dedicated Control committee at the management level on a quarterly basis; performed and implemented by the Risk Management and significant risks were highlighted, analyzed, and reported to Compliance Department to monitor and ensure that the the Board of Directors at every board meeting. In addition, operators adequately and properly apply and implement the ROC approved the establishment of one more committee the risk management policies and procedures in place, and called the Strategic Risk Committee.
Annual Report 2013 Microfinance Institution “Amret” 26 Risk Management (Cont.)
2. Strategic Risk Management The Committee is composed of the following members: Strategic risk refers to potential risks to Amret’s earnings and 1. Chief Executive Officer (ALCO Chairperson) capital arising from adverse business decisions, improper 2. Head of Treasury Secretariat (Deputy Chairperson) implementation of decisions, or lack of responsiveness to 3. Deputy Chief Executive Officer (Member) changes in the external business environment. 4. Head of Risk Management and Compliance (Member) The more a business expands in a highly competitive environment, the greater the chance of risks occurring that 5. Head of internal Audit (Observer) could potentially affect its strategy. To mitigate risks, the 6. Economic Analyst (Observer) Strategic Risk Committee (SRC) was recently established at 7. treasury Manager (Secretary) the Executive Management Committee level. The Strategic Risk Committee, headed by the Chief Executive Officer, was 4. Audit Committee created to monitor such risks in order to ensure that Amret’s The Audit Committee is established and chaired by an strategy is responsive to the market and able to keep Amret independent board member. Its mission is to ensure the growing sustainably. effectiveness and efficiency of internal audit tasks and the Formulating strategy and monitoring its implementation, internal control system, and ensure the adequacy of reporting including a strategic plan and a business plan, are done by and decision tools. the Risk Management and Compliance Department. In The Audit Committee meets at least four times a year mitigating strategic risk, Amret has put into action periodic (quarterly) in March, June, September and December, and monitoring tools with regard to strategy implementation otherwise as required. The Internal Audit Department and the achievement of predetermined targets. Identifying reports directly to the committee on issues and provides internal and external changes and analyzing the potential recommendations to improve management. impact on Amret are two of its key monitoring tools. To achieve the audit committee’s mission, internal audit is a The mitigation tool in the risk profile is used for strategic key player that provides independent assurance and consulting planning, and strategic risks are monitored on a half-yearly designed to add value and improve Amret’s operations and basis in order to ensure the achievement of short- and long- accomplish its objectives by bringing a systematic, disciplined term strategic plans. approach to evaluate and improve the effectiveness of risk 3. ALCO Committee: management, internal control, and governance processes. As financial risk was growing, the Assets and Liabilities In 2013, the Internal Audit Department conducted Management Committee was set up in 2008. The purpose of assessments of the activities of the head office, provincial Amret’s ALCO is to monitor and manage Amret’s balance offices and branches, and audited 2,605 clients. After internal sheet in order to maximize profitably and foresee financial audit teams conducted assessments and determined that performance. internal controls were adequate, appropriate and effective to provide reasonable assurance that risks are being managed.
Annual Report 2013 27 Microfinance Institution “Amret” Risk Management (Cont.)
5. Credit Risk Management measures can be taken in a timely manner. Credit risk refers to risk of losses due to borrowers’ failure to As a result, the overall performance of the portfolio quality meet their repayment obligations. The objective of credit risk was very good in 2013. The portfolio at risk (PAR>30 days) management is to bring credit losses down to a manageable dropped steadily from 0.11% in December 2012 to 0.07% in level. Thus, the Credit Risk Committee (CRC) was set up December 2013 even though some provinces in the country and is headed by the Deputy Chief Executive Officer. The suffered from flooding during the year. This clearly suggests committee holds a regular meeting every three months to that the flood had no significant impact on Amret’s clients’ discuss issues related to credit risk in order to maintain and repayment capacity. The good quality of Amret’s portfolio manage Amret’s portfolio at an acceptable risk exposure also comes from both internal and external factors. level. Management has improved credit policies/procedures and In order to manage credit risks, the committee established working instructions, strengthened client follow-up after methodologies for credit risk limits according to economic loan disbursements, implemented strong internal control at sector and geographical area, and regularly monitors and all staff levels, and linked staff motivation to the quality of analyzes the risks in the major economic sectors in which the loan portfolio through incentives and staff promotion Amret is highly present. In addition, the quality of the loan in order to strengthen portfolio quality. Furthermore, the portfolio is taken into consideration by monitoring and increase in employment, business activities and income analyzing the portfolio at risk (PAR) at 1-30 days and the generation during 2013 was favorable to clients’ repayment PAR at more than 30 days. The committee will conduct a capacity. These are key contributing factors in Amret study to find out the real root causes so that appropriate successfully maintaining its good portfolio quality.
Activities of Amret’s clients making flat baskets (Rolea B’ier district, Kompong Chhnang province)
Annual Report 2013 Microfinance Institution “Amret” 28 Risk Management (Cont.)
6. Financial Risk Management whose major tasks are to monitor, re-enforce, encourage and support all staff at branch level to adequately and Financial risk is managed and controlled by the Asset and appropriately implement internal control activities. Liability Committee (ALCO) with the primary goal of Additionally, the committee approved the revised Business evaluating/monitoring and approving practices relating Continuity Plan (BCP) and the Business Manual Guidelines to financial risk such as capital risk, foreign exchange (BMG) to be put in place to ensure that Amret can continue risk, interest rate risk, liquidity risk, and customer deposit its business operations and activities to meet its short- and concentration in order to optimize returns while ensuring long-term objectives. that appropriate levels of liquidity are maintained. Moreover, in the last quarter of 2013, the Committee also In the 2013 annual strategy, Amret increased its loan approved key risk indicators (KRIs), risk mapping and portfolio in US$ by looking for funding in KHR and US$ mitigation tools conducted and developed by risk owners or from both deposit products and borrowing from lenders risk-taking units and the Risk Management and Compliance to finance the demand in operations. It tried to limit its Department. exposure to a mismatch between assets and liabilities in US$ stable by reducing the hedge tools of an increased loan Anti-Money Laundering and Combating Terrorist portfolio in KHR and tried to collect savings/deposits in Financing foreign currency. Following this mechanism Amret managed Amret is in constant compliance with all requirements of the 2007 both currency risk and foreign exchange risk efficiently and Law on Anti-Money Laundering and Combating the Financing effectively. In terms of liquidity management, Amret has of Terrorism (AML/CFT 2007), the 2008 Prakas on Anti-Money been actively engaging and implementing internal existing Laundering and Combating the Financing of Terrorism regulatory tools. guidelines and its processes and procedures as issued by the 7. Operational Risk Management National Bank of Cambodia, and with international standards and best practices. Operational risk is the risk due to inadequate or failed internal processes, human error, system failure or the external events The increased sophistication and broader reach of money that affect the institution’s operations. laundering networks and terrorism financing (ML/TF) globally have elevated ML/TF threats to the next level. In the fight against To limit these risks, the Operational Risk Committee was money laundering and terrorist financing, Amret is committed established at management level; it is chaired by the Head of to developing and maintaining stringent and sound AML/CFT Risk Management and Compliance. The committee conducts practices that are essential to ensuring that the organization’s its regular meetings on a quarterly basis to discuss issues AML/CFT risks are thoroughly managed and addressed. These related to operational risks in order to achieve an optimal efforts will help reduce the cost to the organization of AML/CFT balance between risks and returns. investigations and legal issues, as well as protecting and enhancing In 2013, to more effectively and efficiently implement and the organization’s integrity and reputation. strengthen the internal control system, the Committee Amret keeps strengthening its enterprise-wide AML/CFT decided to establish the position of Internal Controller, programs by adopting a risk-based approach to ensure that key
Annual Report 2013 29 Microfinance Institution “Amret” Risk Management (Cont.)
measures are in place to prevent and mitigate money laundering From 2011 to 2013, Amret was rated either A- or A+ with a stable and terrorism financing commensurate with compliance risks that outlook every year, which means that Amret was deemed to have have been identified and assessed. strong operations and performance and good strategic vision and As part of its surveillance mechanism to combat money laundering planning. Risks also are well identified, monitored and managed and terrorism financing, the Risk Management and Compliance with minimum exposure to short-term and foreseeable risks. Department regularly communicates the AML blacklist as issued In 2010, Amret was rated α- with positive outlook by M-CRIL, by the National Bank of Cambodia, the United Nations Security which means that the company had a strong capacity to meet its Council (UNSC), embassies and other relevant bodies to all financial obligations, had very good operations, and was stable branches and departments to ensure that proper screening is even if could be affected by major internal or external events. carried out and in place. In conclusion, Amret has obtained the same rating grade for the RATING credit and financial rating for the last four years, 2010-2013, while Amret was rated by the international rating agency Microfinanza. maintaining excellent quality.
This document certifies that MicroFinanza Rating has assigned to AMRET - Cambodia
the Microfinance Institutional Rating grade: A- Outlook: Stable ratingÊ fieldÊ visit: NovemberÊ 13 cut-offÊ periodÊ forÊ theÊ financialÊ andÊ operationalÊ dataÊ analysis: SeptemberÊ 13
Grade Definition
Strong capacity to manage risks. This capacity may be affected by a deterioration of the operations or economic conditions. Strong and stable A- fundamentals. Good client protection systems.
ThisÊ ratingÊ remainsÊ validÊ until: FebruaryÊ 15 Aldo Moauro
Milan, March 14
Executive Director - MicroFinanza Rating
Annual Report 2013 Microfinance Institution “Amret” 30 Client Testimonials
Mr. UY Chamroeun, 34 years old, an Amret customer, residing in Ka Ort village, Peany commune, Kompong Tralach district, Kompong Chhnang province. In 2003, he decided to borrow from Amret for the first time, taking out a loan for the amount of 1,000 US dollars to serve as additional capital. The loan was made with the aim of maintaining his old customers and attracting many more new customers. “I am very proud of my current success and happy that this success has improved my living conditions, and I would like to express my profound thanks to Amret for providing me with a loan, which helped lessen a great deal of the hardships I have faced so far,” says Mr. UY Chamroeun.
MORM Sao, 53 years old, living in Wat village, Longvek commune, Kampong Mr. Khim Khnak is an Tralach district, Kampong Chhnang Amret customer living province, has been operating a small in Prey Totoeung village, business in the village, selling fish, meat, Trapaing Veng commune, vegetables, etc. It has been six years since Kandal Stoeung district, she first used Amret’s credit to facilitate Kandal province. Mr. her current selling business. Her business’s KHIM Khnak stresses, “Up success has resulted from her selling goods to now, I have borrowed at reasonable prices (taking small profits) and repaid Amret for three and, in particular, from allowing her phases; now, the third phase clients to buy the goods on credit that she loan that I am repaying is collects at the end of the month. Finally, for the purchase of a motor cultivator to plow rice fields. When I have free time, I she suggests that if people use loans, they help plow rice fields for other villagers, and I am hired to transport sheaves in order should know how to use the money to to generate more income. Thanks to the loans provided by Amret, and because of make money, so that they will be able to money earned from my hard work, my living conditions are now better.” He goes pay back the loan. If they use the loans for on to say, “I have a suggestion for other customers. Before you take out a loan, unintended expenses, they will not be able you should have an appropriate plan, and if you use the loan to purchase items for to repay the loans. business operations, you should purchase only those items, not any other things, to avoid improperly using the money.”
Annual Report 2013 31 Microfinance Institution “Amret” Branch Network
Cambodia Map
LAOS Nepal China Taiwan THAILAND Bhutan OTDAR Philippines MEANCHEY
Sea STUNG Bangladesh TRIENG South RATANAKKIRI India BANTEAY PREAH VIHEAR Myanmar MEANCHEY China SIEMREAP Laos Sea
Thailand BATTAMBANG Philippines PAILIN Vietnam MONDULKIRI KAMPONG THOM Bay of Bengal KRATIE Cambodia PURSAT
KAMPONG Sri Lanka CHHANG Andaman Sea Brunei KAMPONG CHAM
PHNOM PENH KAMPONG KOH KONG M alaysia SPEU PREY VENG KANDAL VIETNAM
SVAY RIENG North Singapore Gulf of Thailand
TAKEO KAMPOT Indian Ocean Indonesia SIHANOUKVILLE
KEP
Branch Network and Operating Areas
December December December 2013 2012 2011
Number of Operating Provinces* 21 18 16
Number of Operating Districts 143 133 112
Number of Offices 116 99 70
Number of Village Associations (VA) 6,445 6,268 5,004
Annual Report 2013 Microfinance Institution “Amret” 32 Staff, Staff Development & International Visiting Program (IVP)
The number of Amret staff has grown gradually from year to year Capacity Development to support its operational growth. The number of staff grew by In 2013, the Training Department provided training to 2,435 staff 43.24% (2,425) and 20.04% (2,911) in 2012 and 2013. At the end (673 new recruited staff, 361 promoted staff, and 1,401 existing of 2013, the total number of female staff members working for staff) from all branches. At the same time, 130 branches were Amret was 984 (33% of total staff). rolled out and coached on the Core Banking System (CBS, T24), 29 branches were rolled out and coached on SME, and 14 branches Number of Staff participated in a pilot test. In addition, 851 staff were coached on product knowledge, and 2,021 staff from all of Amret’s 118 2,911 3,000 branches as a whole were also specifically coached on T24. 2,425 Besides the internal training within the company, each staff member 2,500 is also given an opportunity to enroll in outside training courses or 2,000 1,693 degree programs to build more skills for both current operational development and future career development. In 2013, 435 staff 1,500 1,288 members were sent to attend 51 local short training courses. Amret 964 also sent staff to two international training courses in the United 1,000 Arab Emirates and Hong Kong, and to other important training courses in topics such as English, ACCA, CFA, BBA, and MBA. 500 In 2013, Amret hosted an International Visiting Program (IVP) 0 for two groups of the visitors from China and Laos on the topic 2009 2010 2011 2012 2013 of “Microfinance Operations” and the “Microfinance Situation in Cambodia”.
Association of Microfinance Center , training service provider in Lao PDR Association of Micro-credit Companies in Guangxi
Annual Report 2013 33 Microfinance Institution “Amret” Activities of Amret’s clients weaving Houls (Sithor Kandal district, Prey Veng province) Ceremony of handing over consumer goods to Preah Sihanouk Provincial Referral Hospital Social & Environmental Responsibility
I. Introduction to Amret’s Social Performance Management (SPM)
Amret has a strong eye on the triple bottom line goals of the and weaknesses In terms of CPP, and come up with a plan institution (economic, social and environment) with strong for addressing any identified gaps and enhancing business motivation and support from the Board of Directors. In 2008, practices around client protection. Amret recruited an officer to be responsible for its Social • Amret was selected to be a project counterpart for the Performance Management (SPM) system. The officer is in charge “CMA’s Project – Client Protection Initiative” funded of developing and updating any policies and SPM tools. Likewise, by the AFD. Amret will benefit from the project, which the Social Performance Management Committee (SPMC) chaired shall help the institution take action to comply with the by the CEO and related management staff was formed in June 2011 Smart Campaign’s adequate standards of client care to to be in charge of designing and monitoring the implementation obtain Client Protection Certification and contribute to the of Amret’s SPM Framework for social responsibility to the growth of our institution and clients. environment, clients, employees and communities in line with Amret’s vision, mission, and social objective. • Amret’s CPP-Client Protection Principles should stay as they are listed on the Smart Campaign Website: II. Social Responsibilities 1- Appropriate Product Design and Delivery: Amret will Social responsibility is an important dimension of Social take adequate care to design products and delivery Performance Management (SPM). Amret strives to contribute to channels in such a way that Amret does not cause its the development and management of society and the environment clients harm. Products and delivery channels will be and endeavors to ensure that none of Amret’s operations have any designed with client characteristics in mind. negative impact on staff, clients, communities or the environment. 2- Prevention of Over-Indebtedness: Amret will take A. Social Responsibility to Clients adequate care in all phases of our credit process to Amret’s Client Protection Principles determine that our clients have the capacity to repay their loans without becoming over indebted. In addition, • Amret pays considerable attention to protecting its clients. Amret will implement and monitor internal systems In fact, Amret joined the Smart Campaign in December that support the prevention of over-indebtedness; it 2010 to get the information, tools and resources from will foster efforts to improve market-level credit risk this campaign and benefit from the experiences of other management (such as credit information sharing). global MFIs implementing the core principles of Client Protection; the goal was to build sound lending practices 3- Transparency: Amret will communicate clear, sufficient for our institution to deliver transparent, respectful and and timely information in a manner and language clients prudent financial services to our clients. can understand so that clients can make informed decisions. The need for transparent information on • Amret commissioned an assessment by Micorfinanza Srl to product pricing, terms and conditions is highlighted. increase awareness, understand our institution’s strengths
Annual Report 2013 Microfinance Institution “Amret” 36 Social & Environmental Responsibility (Cont.)
4- Responsible Pricing: Pricing, terms and conditions will clients’ and communities’ capacities. This project is working be set in a way that is affordable to clients while allowing in close collaboration with government officers to conduct the financial institution to be sustainable. Amret will training in agricultural techniques. This project is becoming strive to provide positive real returns on deposits. popular among our clients and communities and with local authorities. As result in July 2013, more than 1,250 participants 5- Fair and Respectful Treatment of Clients: Amret will attended the courses provided by Amret. treat its clients fairly and respectfully and will not discriminate. Amret will ensure adequate safeguards to Financial Literacy Training Program: Amret has begun to detect and eliminate corruption as well as aggressive or provide these financial education programs to its clients in order abusive treatment by our staff, particularly during loan to improve their knowledge of and skills in budgeting, savings, and debt collection processes. and debt management to improve the management of their assets. From May to July 2013, Amret gave 10 training courses 6- Privacy of Client Data: We need to safeguard and for its clients, these courses were attended by 250 participants. protect client information at all times. We do not believe in disclosing client information without their Client Poverty Assessment and Measurement: Amret has knowledge and consent. adopted the Progress out of Poverty Index (PPI) as a tool for social performance management in order to monitor poverty 7- Mechanisms for Complaint Resolution: We believe rates, help improve its products and services, and track poverty in listening to our clients and ensuring that their trends over time. concerns and grievances are addressed effectively. We are committed to providing formal channels As part of its social responsibility to its clients, Amret has of communication with customers through which diversified more products or services to respond to its client’s customers can give feedback on the quality of our needs; it offers SME loans, agriculture loans, business loans, service. improvement loans, consumption loans, savings products and inter-branch money transfers. Clients Exit and Satisfaction Surveys: Amret conducts client exit and satisfaction surveys to respond to current market B. Social Responsibility to Staff demands and enhance new products in order to monitor shifts Staff Capacity: Amret takes into account staff capacity in clients’ needs, assess or identify complaints from clients, and building by providing core basic training courses, such as determine the real reason behind the departure. training on internal policies and procedures, financial products Customer Care Mechanisms: Amret has formal mechanisms and business ethics, Social Performance Management (SPM) to take care of its customers, such as the Customer Service and the Client Protection policy to all new recruits in order to policy and procedure, Suggestion Box policy and procedure, Call enhance their ability to work independently. Amret also sends Center policy and procedure, the Loyalty Program policy and staff members to international training workshops and on study procedure, and the Customer Complaint policy and procedure. tours to benefit from the real practical experience of other financial institutions. Clients’ Agricultural Capacity Building: Amret has established a non-financial service program to build up our Working Environment: Amret has policies and procedures on
Annual Report 2013 37 Microfinance Institution “Amret” Social & Environmental Responsibility (Cont.)
Corporate Culture, Corporate Values, Human Resources and grievances relating to wages and/or compliance with labor law, Sexual Harassment, Whistle Blowing and Business Continuity general labor regulations and collective agreements applicable to ensure all staff are treated fairly and build a common to the establishment; they are also responsible for presenting relationship among staff. Moreover, Amret pays attention to to labor inspectors all complaints and criticism regarding the health and safety of all staff. It has a full-time nurse on compliance with labor legislation and regulations and making staff in charge of first aid, medical treatment and coordinating sure that the provisions relating to the health and safety of insurance claims for employees. workers are enforced.
High Potential staff Program: Amret designed this program staff Loans: Amret designed this product with the goal of to select the Amret staff members with the most potential to motivating existing staff through the provision of low-interest build their capacity for promotion to higher positions. It will loans to support their personal goals or projects. encourage and motivate staff to increase their willingness to work Amret rejects all discrimination based on race, religion, gender for Amret and contribute to national development by building or political allegiances, and only focuses on staff competency up human resources for the future. To date, Amret’s HIPO and ethics; Amret provides equal opportunities to all staff and Program has had four generations with 72 potential staff (10 of the public when applying for new or higher positions within whom women); most of them have had greater opportunity to Amret. In addition, Amret promotes gender equality by setting be promoted to higher positions within the institution. a target number of female staff to be chosen every year to be in shop stewards: Amret’s staff representatives are responsible balance with the number of male staff. for presenting to the employer any individual or collective
Ceremony of handing over study materials and computers to Cooperation for Peace Organization in Phnom Penh
Annual Report 2013 Microfinance Institution “Amret” 38 Social & Environmental Responsibility (Cont.)
C. Social Responsibility to the Community and Bio-Digester Loan: Amret is cooperating with the National the Environment Biodigester Program (NBP) to provide a unique loan, the “Bio- Digester Loan”. Amret designed this product for individuals Social and Environmental Policy and Procedures: Amret has a formal social and environmental policy and procedures intending to improve their standards of living by building bio- that can identify social and environmental risks/impacts digester plants to reduce household expenses and improve the associated with its staffs’ operations and clients’ business environment by helping reduce deforestation, protect natural activities. The policy and procedures are intended to offer resources and lower greenhouse gas emissions of methane guidelines and training to implement so as to minimize negative (CH4). impacts regarding social and environmental sustainability. To volunteer and internship Program: This program was ensure they perform effectively, the policy and procedures established to provide volunteers and interns with an have been integrated into the existing loan appraisal system opportunity to get real work experience with Amret. and standard operating procedures (application, appraisal, loan Contributions to Other Social Activities: As part of its contracting and disbursement, and recovery and monitoring). social responsibility, Amret actively contributes to and partners Amret’s Exclusion List: This list clearly excludes prohibited with other development sectors for other social activities. In activities or businesses in accordance with international 2013 Amret worked with others to support initiatives and conventions and national legislation and regulations, such as social activities such as those of the Cambodian Red Cross, exploitative forms of forced or child labor, trade in weapons the Referral Hospital in Preah Sihanouk province, the Malop and munitions, gambling, brothels, wildlife or wildlife Tapang Organization, the Environment Banner in Battambang products regulated under the Convention on International and Kampot provinces, and “Green is Not Just a Color” Trade in Endangered Species of Wildlife and Flora (CITES), and “Doing Business by Green Mindset” with Association production or trade in radioactive materials or significant International des Étudiants en Sciences Économiques et volumes of hazardous chemicals, illegal fishing activities, illegal Commerciales (AIESEC) and the Cooperation for Peace commercial logging operations, and other illegal activities. Organisation.
Ceremony of handing over materials to the Sub-branch of Red Cross in Preah Sihanouk province and Preah Sihanouk City Hall
Annual Report 2013 39 Microfinance Institution “Amret” Activities of Amret’s clients making small round baskets (Chikreng district, Siem Reap province) Annual Report 2013 41 Microfinance Institution “Amret” FINANCIAL STATEMENTS FOR THE YEAR ENDED
Directors’ Report 43
Independent auditor’s report 45
Balance Sheet 47
Income Statement 48
Statement Of Changes In Equity 49
Cash Flow Statement 50
Notes To The Financial Statements 52
APPENDIX: Notes on compliance with the Central Bank’s Prakas * i - viii * The Appendix does not form part of the audited financial statements.
Annual Report 2013 Microfinance Institution “Amret” 42 Directors’ Report
The Board of Directors (the Directors) hereby submits their report vALUAtioN MEtHoDs together with the audited financial statements of Amret Co., Ltd. (the At the date of this report, the Directors are not aware of any Company) for the year ended 31 December 2013. circumstances which have arisen which would render adherence to the PRiNCiPAL ACtivitiEs existing method of valuation of assets and liabilities in the financial statements of the Company misleading or inappropriate in any The principal activity of the Company is to provide loans, saving and material respect. other financial services to local customers through its head office in Phnom Penh and its various provincial and district offices in the CoNtiNGENt AND otHER LiABiLitiEs Kingdom of Cambodia. At the date of this report, there is: FiNANCiAL PERFoRMANCE (a) no charge on the assets of the Company that has arisen The financial performance for the year ended 31 December 2013 is set since the end of the year that secures the liabilities of any other out in the income statement on page 48. person; or On 1 July 2013, dividends amounting to KHR4,368,206 thousand (b) no contingent liability in respect of the Company that has were declared and paid on 23 July 2013 in respect of the Company’s arisen since the end of the year other than in the ordinary course net profit for the year ended 31 December 2012 (2012: KHR3,678,037 of business. thousand for 2011 net profit). No contingent or other liability of the Company has become BAD AND DoUBtFUL LoANs enforceable, or is likely to become enforceable within the period of 12 months after the end of the year that, in the opinion of the Directors, Before the financial statements of the Company were drawn up, the will or may have a material effect on the ability of the Company to Directors took reasonable steps to ascertain that actions had been meet its obligations as and when they become due. taken in relation to the writing off of bad loans and the making of allowance for bad and doubtful loans, and satisfied themselves that all CHANGE oF CiRCUMstANCEs known bad loans had been written off and adequate allowance had At the date of this report, the Directors are not aware of any been made for bad and doubtful loans. circumstances not otherwise dealt with in this report or the financial At the date of this report, the Directors are not aware of any statements of the Company which would render any amount stated in circumstances which would render the amount written off for bad the financial statements misleading in any material respect. loans or the amount of allowance for bad and doubtful loans in the itEMs oF AN UNUsUAL NAtURE financial statements of the Company inadequate to any material extent. There were no items, transactions or events of a material and unusual AssEts nature that, in the opinion of the Directors, materially affected Before the financial statements of the Company were drawn up, the the financial performance of the Company for the year ended 31 Directors took reasonable steps to ensure that any assets that were December 2013. unlikely to be realised in the ordinary course of business at their There has not arisen in the interval between the end of the year and values as shown in the accounting records of the Company have been the date of this report any item, transaction or event of a material written down to an amount which they might be expected to realise. and unusual nature likely, in the opinion of the Directors, to affect At the date of this report, the Directors are not aware of any substantially the results of the operations of the Company for the circumstances which would render the values attributed to the assets current year. in the financial statements of the Company misleading in any material respect.
Annual Report 2013 43 Microfinance Institution “Amret” Directors’ Report
tHE BoARD oF DiRECtoRs i) adopt appropriate accounting policies that are supported by reasonable and prudent judgements and estimates, and then apply The members of the Board of Directors during the year and as at the them consistently; date of this report are: ii) comply with the disclosure requirements and the guidelines • Dr. Claude Fernand Germain Falgon Chairman issued by the Central Bank and Cambodian Accounting Standards (appointed on 22 February 2005) or, if there has been any departure from such standards in the • Mr. Chea Phalarin Director interest of fair presentation, ensure that this has been appropriately (appointed on 10 July 2000) disclosed, explained and quantified in the financial statements; • Mr. Guillaume, Jean Jacques Lepoutre Director iii) maintain adequate accounting records and an effective (appointed on 22 March 2011) system of internal controls; • Mrs. Amanda Hannan Independent Director iv) prepare the financial statements on a going concern basis (appointed on 29 June 2012) unless it is inappropriate to assume that the Company will continue operations in the foreseeable future; and • Mr. Angus Poston Independent Director (appointed on 25 December 2012) v) effectively control and direct the Company and be involved in all material decisions affecting its operations and performance • Mr. Jean Claude Leullier Independent Director and ascertain that such matters have been properly reflected in the (appointed on 25 December 2012) financial statements. • Mr. Kay Lot Independent Director The Directors confirm that the Company has complied with the above (appointed on 25 December 2012) requirements in preparing the financial statements. DiRECtoRs’ BENEFits APPRovAL oF tHE FiNANCiAL stAtEMENts During and at the end of the year, no arrangement existed, to which The accompanying financial statements, together with the notes the Company was a party, with the object of enabling the Directors thereto, present fairly, in all material respects, the financial position of of the Company to acquire benefits by means of the acquisition of the Company as at 31 December 2013 and its financial performance shares in or debentures of the Company or any other body corporate. and cash flows for the year then ended in accordance with the No Director of the Company has received or become entitled to guidelines issued by the Central Bank and Cambodian Accounting receive any benefit by reason of a contract made by the Company or Standards, were approved by the Board of Directors. with a firm of which the Director is a member, or with a Company Signed in accordance with a resolution of the Board of Directors. in which the Director has a material financial interest other than as disclosed in the financial statements. REsPoNsiBiLitiEs oF tHE BoARD oF DiRECtoRs iN REsPECt oF tHE FiNANCiAL stAtEMENts
The Directors are responsible for ensuring that the financial statements ______are properly drawn up so as to present fairly, in all material respects, the financial position of the Company as at 31 December 2013 and Mr. Chea Phalarin its financial performance and cash flows for the year then ended. In Chief Executive Officer preparing these financial statements, the Directors are required to: Phnom Penh, Kingdom of Cambodia Date: 18 March 2014
Annual Report 2013 Microfinance Institution “Amret” 44 Independent Auditor’s Report
to the shareholders of Amret Co., Ltd. We have audited the accompanying financial statements of Amret policies used and the reasonableness of accounting estimates made Co., Ltd. (the Company), which comprise the balance sheet as at by management, as well as evaluating the overall presentation of 31 December 2013, and the income statement, the statement of the financial statements. changes in equity and the cash flow statement for the year then We believe that the audit evidence we have obtained is sufficient ended, and notes, comprising a summary of significant accounting and appropriate to provide a basis for our audit opinion. policies and other explanatory information. Opinion Management’s responsibilities for the financial statements In our opinion, the financial statements present fairly, in all material Management is responsible for the preparation and fair respects, the financial position of the Company as at 31 December presentation of these financial statements in accordance with the 2013, and its financial performance and cash flows for the year guidelines issued by the Central Bank and Cambodian Accounting then ended in accordance with the guidelines issued by the Central Standards, and for such internal control as management determines Bank and Cambodian Accounting Standards. is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s responsibility For PricewaterhouseCoopers (Cambodia) Ltd. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Cambodian International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. ______An audit involves performing procedures to obtain audit evidence By Kuy Lim about the amounts and disclosures in the financial statements. The Partner procedures selected depend on the auditor’s judgement, including assessment of the risks of material misstatement of the financial Phnom Penh, Kingdom of Cambodia statements, whether due to fraud or error. In making those risk Date: 18 March 2014 assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting
Annual Report 2013 45 Microfinance Institution “Amret” Activities on the day of credit being offered to Group Loan (Kompong Tralach district, Kompong Chhnang province) Balance Sheet As At 31 December 2013
2013 2012 Note KHR ‘000 Us$ KHR ‘000 Us$ AssEts Cash on hand 4 50,423,033 12,621,535 21,792,412 5,454,922 Balances with the Central Bank 5 79,494,596 19,898,522 50,651,919 12,678,828 Balances with banks 6 24,440,532 6,117,780 12,583,483 3,149,808 Loans to customers 7 813,513,224 203,632,847 593,926,239 148,667,394 Investment 99,875 25,000 99,875 25,000 Other assets 8 21,015,514 5,260,454 15,328,108 3,836,823 Property and equipment 9 9,342,588 2,338,570 7,703,116 1,928,189 Intangible assets 10 1,545,716 386,913 1,802,650 451,227 Deferred tax assets 11 2,088,721 522,834 1,654,114 414,046 total assets 1,001,963,799 250,804,455 705,541,916 176,606,237 LiABiLitiEs AND EQUitY LiABiLitiEs Deposits from customers 12 376,989,473 94,365,325 333,538,173 83,488,905 Borrowings 13 403,410,232 100,978,781 200,621,853 50,218,236 Other liabilities 14 26,471,509 6,626,160 19,058,520 4,770,594 Current income tax liabilities 11 9,483,088 2,373,739 6,521,114 1,632,319 Provident fund obligations 15 10,658,402 2,667,935 8,558,027 2,142,184 total liabilities 827,012,704 207,011,940 568,297,687 142,252,238 EQUitY Share capital 17 11,379,120 2,848,340 11,379,120 2,848,340 Share premium 5,535,835 1,385,691 5,535,835 1,385,691 Subordinated debt 16 4,032,971 1,009,505 4,032,971 1,009,505 Statutory reserve 2,285,868 572,182 2,285,868 572,182 Currency risk reserve 2,686,781 672,536 2,383,890 596,718 Legal reserve 1,137,912 284,834 1,137,912 284,834 Capital strengthening reserve 5,966,979 1,493,612 4,621,873 1,156,914 Retained earnings 141,925,629 35,525,815 105,866,760 26,499,815 total equity 174,951,095 43,792,515 137,244,229 34,353,999 total liabilities and equity 1,001,963,799 250,804,455 705,541,916 176,606,237 The accompanying notes on pages 96 to 104 form an integral part of these financial statements.
Annual Report 2013 47 Microfinance Institution “Amret” Income Statement For The Year Ended 31 December 2013
2013 2012 Note KHR ‘000 Us$ KHR ‘000 Us$ Interest income 18 198,389,080 49,659,344 148,217,908 37,100,853 Interest expense 19 (46,224,360) (11,570,553) (33,005,148) (8,261,614) Net interest income 152,164,720 38,088,791 115,212,760 28,839,239
Provision for bad and doubtful loans 7 (431,646) (108,047) (556,254) (139,238) Net interest income after provision for bad and doubtful loans 151,733,074 37,980,744 114,656,506 28,700,001 Other income 20 1,643,053 411,277 2,477,948 620,262 Personnel expenses 21 (55,879,618) (13,987,389) (42,712,345) (10,691,451) Depreciation and amortisation charge 22 (4,132,524) (1,034,424) (3,907,819) (978,177) General and administrative expenses 23 (40,970,530) (10,255,452) (33,672,959) (8,428,776) Operating profit 52,393,455 13,114,756 36,841,331 9,221,859 Grant income 24 442,675 110,807 - - Profit before income tax 52,836,130 13,225,563 36,841,331 9,221,859 Income tax expense 11 (10,761,058) (2,693,632) (7,719,969) (1,932,408) Profit for the year 42,075,072 10,531,931 29,121,362 7,289,451
The accompanying notes on pages 96 to 104 form an integral part of these financial statements.
Annual Report 2013 Microfinance Institution “Amret” 48 Statement Of Changes In Equity For The Year Ended 31 December 2013
Capital strength- share share subordi- statutory Currency Legal ening Retained capital premium nated debt reserves risk reserve reserve reserve earnings total KHR’000 KHR’000 KHR’000 KHR’000 KHR’000 KHR’000 KHR’000 KHR’000 KHR’000
As at 1 January 2012 11,379,120 5,535,835 4,032,971 2,285,868 2,184,559 1,137,912 3,276,768 81,967,871 111,800,904 Transfers to reserves - - - - 199,331 - 1,345,105 (1,544,436) - Dividends paid ------(3,678,037) (3,678,037) Profit for the year ------29,121,362 29,121,362
As at 31 December 2012 11,379,120 5,535,835 4,032,971 2,285,868 2,383,890 1,137,912 4,621,873 105,866,760 137,244,229
Equivalent in US$ 2,848,340 1,385,691 1,009,505 572,182 596,718 284,834 1,156,914 26,499,815 34,353,999
As at 1 January 2013 11,379,120 5,535,835 4,032,971 2,285,868 2,383,890 1,137,912 4,621,873 105,866,760 137,244,229 Transfers to reserves - - - - 302,891 - 1,345,106 (1,647,997) - Dividends paid ------(4,368,206) (4,368,206) P r o fi t f o r t h e y ea r ------42,075,072 42,075,072
As at 31 December 2013 11,379,120 5,535,835 4,032,971 2,285,868 2,686,781 1,137,912 5,966,979 141,925,629 174,951,095
Equivalent in US$ 2,848,340 1,385,691 1,009,505 572,182 672,536 284,834 1,493,612 35,525,815 43,792,515
The accompanying notes on pages 96 to 104 form an integral part of these financial statements.
Annual Report 2013 49 Microfinance Institution “Amret” Cash Flow Statement For The Year Ended 31 December 2013
2013 2012 Note KHR ‘000 Us$ KHR ‘000 Us$
Cash flows from operating activities Cash used in operations 25 (269,211,430) (67,387,092) (84,643,807) (21,187,436) Interest received 195,463,868 48,927,126 145,762,705 36,486,284 Interest paid (41,193,241) (10,311,199) (28,465,710) (7,125,334) Income tax paid 11 (8,233,691) (2,060,999) (6,949,177) (1,739,469) Grant received 346,076 86,627 - - Provident fund paid 15 (446,322) (111,720) (135,030) (33,800) Net cash (used in)/generated from operating activities (123,274,740) (30,857,257) 25,568,981 6,400,245
Cash flows from investing activities Reserve requirement with the Central Bank (3,263,841) (816,981) (13,888,494) (3,476,469) Purchases of property and equipment (*) 9 (5,845,898) (1,463,304) (7,501,927) (1,877,829) Proceeds from sales of property and equipment 30,812 7,713 22,353 5,595 Net cash used in investing activities (9,078,927) (2,272,572) (21,368,068) (5,348,703)
Cash flows from financing activities Proceeds from borrowings 261,692,427 65,504,989 95,317,000 23,859,074 Repayments on borrowings (58,904,048) (14,744,444) (68,925,189) (17,252,863) Dividends paid (4,368,206) (1,093,418) (3,678,037) (920,660) Net cash generated from financing activities 198,420,173 49,667,127 22,713,774 5,685,551
Net increase in cash and cash equivalents 66,066,506 16,537,298 26,914,687 6,737,093 Cash and cash equivalents at the beginning of the year 57,633,963 14,426,524 32,177,970 7,966,816 Currency translation differences - - (1,458,694) (277,385)
Cash and cash equivalents at the end of the year 26 123,700,469 30,963,822 57,633,963 14,426,524
(*) It excluded the payable of non-cash transactions amount KHR 89,915 thousand. The accompanying notes on pages 96 to 104 form an integral part of these financial statements.
Annual Report 2013 Microfinance Institution “Amret” 50 Activities of Amret’s clients preparing to smoke smoked fish (Saut Nikum district, Siem Reap province) Notes To The Financial Statements For The Year Ended 31 December 2013
1. BACKGROUND INFORMATION 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Amret Co., Ltd. (the Company) was initially established in 1991 The principal accounting policies adopted in the preparation as an experimental project by the French NGO Groupe de of the financial statements are set out below. These policies Recherche et d’ Echanges Technologiques (GRET). All assets, have been consistently applied to all the years presented, unless liabilities and reserves of the Project were transferred to the otherwise stated. Company on 1 July 2000. 2.1 Basis of preparation The Company has become a licensed micro-finance institution The Company’s financial statements have been prepared using (MFI) after being duly registered with the Ministry of the historical cost convention except otherwise disclosed and Commerce as a private limited liability company under the in accordance with Cambodian Accounting Standards (CAS) registration number Co. 820/00E, dated 10 July 2000. In 2001, and the guidelines issued by the Central Bank. In applying the Company received its first MFI license from the National CAS, the Company also applies CFRS 7: Financial Instruments: Bank of Cambodia (the Central Bank). On 27 April 2007, the Disclosures. Central Bank renewed its license to conduct micro-finance business for an indefinite period following the Central Bank’s The accounting principles applied may differ from generally Prakas No. B7-06-209, dated 13 September 2006. On 22 accepted accounting principles adopted in other countries January 2009, the Central Bank also granted the Company the and jurisdictions. The financial statements are not intended to license to become a micro-finance deposit-taking institution. present the financial position, financial performance and cash flows in accordance with jurisdictions other than the Kingdom The Company’s main activities are to provide loans, saving and of Cambodia. Consequently, these financial statements are other financial services to local customers through its head addressed only to those who are informed about Cambodian office in Phnom Penh and its various branches in the Kingdom accounting principles, procedures and practices. of Cambodia. The preparation of financial statements in accordance with The Company was incorporated and registered in the Kingdom the guidelines issued by the Central Bank and CAS requires of Cambodia. The Company’s head office is located at No. the use of estimates and assumptions that affect the reported 35BA – 35BB – 35BC, E0 – E4, Street 169, Sangkat Vealvong, amounts of assets and liabilities and disclosure of contingent Khan 7 Makara, Phnom Penh, the Kingdom of Cambodia. assets and liabilities at the date of the financial statements The Company has 14 provincial offices, 87 branch offices, 28 and the reported amounts of revenues and expenses during mini-branch offices and 1 post offices, located in 21 provinces. the reporting period. Although these estimates are based on As at 31 December 2013, the Company had 2,911 employees management’s best knowledge of current events and actions, (31 December 2012: 2,425 employees). actual results may ultimately differ from those estimates. The areas involving a higher degree of judgement or complexity, or The financial statements were authorised for issue by the Board areas where assumptions and estimates are significant to the of Directors on 14 March 2014. financial statements are disclosed inNote 3.
Annual Report 2013 Microfinance Institution “Amret” 52 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
2.2 Financial reporting framework exchange gains and losses resulting from the settlement of such transactions and from the translation at the year-end On 28 August 2009, the National Accounting Council (NAC) exchange rate of monetary assets and liabilities denominated of the Ministry of Economy and Finance (MoEF) announced in currencies other than KHR are recognised in the income the adoption of Cambodian International Financial Reporting statement. Standards (CIFRS) which are based on all standards published by International Accounting Standard Board including The translation of KHR into United States dollars (US$) is other interpretation and amendment that may occur in any solely for management’s use only and is based on the official circumstances to each standard by adding “Cambodian”. Public exchange rate regulated by the Central Bank as at the reporting accountable entities shall prepare their financial statements in date, which was US$ 1 equal to KHR 3,995 (31 December accordance with CIFRS for accounting period beginning on or 2012: US$ 1 equal to KHR 3,995). Such translation amounts after 1 January 2012. are unaudited and should not be construed as representations that the KHR amounts represent, or have been or could be The NAC of the MoEF through Circular No. 086 MoEF.NAC converted into US$ at that or any other rate. dated 30 July 2012 approves Banking and financial institution to delay adoption of CIFRS until the periods beginning on or 2.4 Basis of aggregation after 1 January 2016. The financial statements comprise the financial statements of The first financial statement of the Company which willbe the head office and the branch offices after the elimination of prepared under CIFRS is the year ending 31 December 2016. all significant inter-branch balances and transactions. CAS, the current accounting standard used, is different to 2.5 Cash and cash equivalents CIFRS in many areas. Hence, the adoption of CIFRS will have significant impact on the financial statements of the Company. Cash and cash equivalents includes cash on hand, unrestricted balances with the Central Bank, and balances with banks, 2.3 Foreign currency translation and other short-term highly liquid investments with original (a) Functional and presentation currency maturities of three months or less where the Company has full ability to withdraw for general purpose whenever needed. Items included in the financial statements are measured using the currency of the primary economic environment in which 2.6 Loans to customers the entity operates (the functional currency). The financial Loans to customers are stated in the balance sheet at the statements are presented in KHR, which is the Company’s amount of the principal outstanding less any amounts written functional and presentation currency. off and provision for bad and doubtful loans. (b) Transactions and balances Loans are written off when there is no realistic prospect Transactions in currencies other than KHR, the functional of recovery. Recovery of previously written-off loans is and presentation currency, are translated into KHR at the recognised in the income statement. exchange rate prevailing at the date of the transactions. Foreign
Annual Report 2013 53 Microfinance Institution “Amret” Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
2.7 Provision for bad and doubtful loans macroeconomic environment, natural disasters, and widespread deterioration in rural household income, which would render The adequacy of the provision for bad and doubtful loans is customers incapable of reimbursing their outstanding loans. evaluated monthly by management.
The Company follows the mandatory credit classification and 2.8 Property and equipment provisioning as required by the Prakas B7-02-186 dated 13 Items of property and equipment are recorded at cost less September 2002. The Prakas requires microfinance institutions accumulated depreciation and any accumulated impairment to classify their loan portfolio into the following four classes losses. Historical cost includes expenditure that is directly based on number of days past due of principal and/or attributable to bringing the assets to the location and condition interest repayment and ensure that the minimum mandatory necessary for it to be capable of operating in the manner level of specific provisioning is provided depending on loan intended by management. classification, regardless of the assets (except cash) pledged as Subsequent costs are included in the asset’s carrying amount collateral, as follows: or recognised as a separate asset, as appropriate, only when it Number of days is possible that future economic benefits associated with the Classification past due Provision item will flow to the Company and the cost of the item can Short-term loans be measured reliably. All other repair and maintenance are (less than one year) charged to the income statement during the financial year in Standard 0 - 29 days 0% which they are incurred. Substandard 30 - 59 days 10% Depreciation of property and equipment is charged to the Doubtful 60 - 89 days 30% income statement on a declining balance method at following Loss 90 days or more 100% annual rates: Long-term loans Office improvements 20% (more than one year) Office equipment 25% Standard 0 - 29 days 0% Substandard 30 - 179 days 10% Information technology (IT) equipment 50% Doubtful 180 - 359 days 30% Furniture and fittings 25% Loss 360 days or more 100% Motor vehicles 25% In addition, the Company makes a general risk provision by The assets’ residual values and useful lives are reviewed, and providing for the excess of the portfolio at risk (past due loans adjusted prospectively if appropriate, if there is an indication for 30 days or more) which is over than the mandatory specific of a significant change since the last reporting date. level of provisioning as required by the Central Bank above. An asset’s carrying amount is written down immediately to its Management believes that this more reasonably reflect the recoverable amount if the asset’s carrying amount is greater provision necessary to absorb risks relating to problems in the than the estimated recoverable amount.
Annual Report 2013 Microfinance Institution “Amret” 54 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
Gains or losses on the sale of property and equipment are assets to the other entity or to exchange financial assets or recognised upon the disposal of such assets. financial liabilities with another entity under conditions that are potentially unfavourable to the entity, if otherwise, it is 2.9 intangible assets treated as equity. The subordinated debts which are approved Intangible assets consist of computer software and license by the Central Bank are included as a Tier II line item in the fee and are stated at cost less accumulated amortisation and calculation of the Company’s net worth in accordance with the accumulated impairment losses. Acquired computer software guidelines of the Central Bank. is capitalised on the basis of the cost incurred to acquire the 2.13 Reserves specific software and bring it into use. Intangible assets are amortised over their estimated useful lives of ten years using (i) Statutory reserve the straight-line method. The statutory reserve amounting to KHR 2,285,868 thousand 2.10 Impairment of non-financial assets (equivalent to US$572,182) was established on 1 July 2000 in accordance with fixed amount as stated in the Memorandum Assets that have an indefinite useful life are not subject to and Articles of Association (MAA) of the Company. This amortisation and are tested annually for impairment. Assets reserve is declared non-distributable. There is no movement in that are subject to amortisation or depreciation are reviewed the statutory reserve. for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An (ii) Currency risk reserve impairment loss is recognised for the amount by which the The currency risk reserve was established to cover the currency asset’s carrying amount exceeds its recoverable amount. The risk exposure of the Company originating from its operations. recoverable amount is the higher of an asset’s fair value less The reserve is calculated based on the rate of 2% of net open costs to sell and value in use. For the purposes of assessing position between total assets and total liabilities denominated impairment, assets are grouped at the lowest levels for which in US$. there are separately identified cash flows (cash-generating units). (iii) Legal reserve
2.11 Borrowings The legal reserve, as stated in the MAA, is maintained by allocating 5% of the Company’s annual net profit after Borrowings are stated at the amount of the principal deduction of prior years’ losses. This allocation shall cease outstanding. Fees paid on the establishment of borrowing when the total legal reserve reached 10% of the Company’s facilities amortised on straight line basis over the period of registered capital. each borrowing facilities to the income statement. (iv) Capital strengthening reserve 2.12 subordinated debt The capital strengthening reserve is maintained in accordance Subordinated debts are treated as financial liabilities when with the borrowing agreement with Instituto De Credito Oficial there are contractual obligations to deliver cash or financial of the Kingdom of Spain. During the life of the borrowed
Annual Report 2013 55 Microfinance Institution “Amret” Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013 funds, the Company, as a borrower, shall establish and keep a reserve fund for capital strengthening. The reserve is calculated at the rate of 3.5% of the outstanding borrowing as at the end of each financial year. The agreement will be matured on 4 March 2021.
2.14 Provisions Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. When there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are re-measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as interest expense.
2.15 Provident fund obligations The Company provides for provident fund obligations which are conditional on the number of years which employee remains in service for the Company up to retirement age and the completion of a minimum service period. The employee is entitled for each year the benefit which is equal to the percentage of December salary of each fiscal year within the minimum service period below:
Number of working years Percentage (%) of December salary of each fiscal year
Within 6 years 100 After 6 years but not more than 10 years 120 More than 10 years 130
The Company adjusts the past service provident fund obligation at an estimated inflation rate determined by management. This adjustment is done at December of each year of service. The provident fund will be fully paid to the employee upon retirement age, or upon termination of employment with the Company. If employee resigns before retirement age, they are entitled to the following portion of provident fund:
Number of working years Percentage (%) of accumulative provident fund
Less than 3 years - From 3 years but not more than 7 years 25 From 7 years to 12 years 50 More than 12 years 75
Annual Report 2013 Microfinance Institution “Amret” 56 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
No separate fund is maintained i.e. there is no separate interest- purposes and the amounts used for taxation purposes. bearing bank account or any other asset for the fund. Deferred tax is measured at the tax rates expected to be applied to temporary differences when they reverse, based on laws that The liability recognised in the balance sheet in respect of these have been enacted or substantively enacted by the reporting provident fund obligations at the end of the reporting period. date. Deferred tax assets and liabilities are offset if there is 2.16 Interest income and expense a legally enforceable right to offset current tax liabilities and Interest income on loans to customers, balances with the Central assets and they relate to income taxes levied by the same tax Bank and balances with banks are recognised on an accrual authority on the same taxable entity. basis. Where a loan becomes non-performing, the recording A deferred tax asset is recognised only to the extent that it of interest income on loans to customers is suspended until it is probable that future taxable profits will be available against is realised on a cash basis. which temporary difference can be utilised. Deferred tax assets Interest expenses on deposits from customers and borrowings are reviewed at each reporting date and are reduced to the are recognised on an accrual basis. extent that it is no longer probable that the related tax benefit will be realised. 2.17 Fee and commission income 2.20 Related party transactions The Company earns fee and commission income from a diverse range of services it provides to its customers, mainly Parties are considered to be related if one party has the ability, from collection of loan loss recovery and fee charge on money directly or indirectly, to control the other party or exercise transfer. significant influence over the other party in making financial and operating decisions, or where the Company and the other
2.18 Leases party are subject to common control or significant influence. Leases in which a significant portion of risks and rewards of Related parties may be individuals or corporate entities and ownership of assets are retained by the lessor are classified as include close family members of any individual considered to operating leases. Payments made under operating leases are be a related party. charged to the income statement on a straight-line basis over In accordance with the Law on Banking and Financial the period of the leases. Institutions, related parties are defined as parties who hold, 2.19 Current and deferred income tax directly or indirectly, at least 10% of the capital of the Company or voting rights and include any individual who participates in The current income tax charge is calculated on the basis of the the administration, direction, management or internal control tax law enacted or substantively enacted at the reporting date in of the Company. Cambodia where the Company operates and generates taxable income. 2.21 Dividend Deferred tax is provided using the balance sheet liability Dividend distribution to the Company’s shareholders is method, providing for temporary differences between the recognised as liability in the period in which they are approved carrying amounts of assets and liabilities for financial reporting by the Company’s shareholders.
Annual Report 2013 57 Microfinance Institution “Amret” Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
3. CRITICAL ACCOUNTING ESTIMATES, ASSUMPTIONS (b) Income tax AND JUDGEMENTS Taxes are calculated on the basis of current interpretations Estimates, assumptions and judgements are continually of the tax regulations. However, these regulations are subject evaluated and are based on historical experience and other to periodic variation and the ultimate determination of factors, including expectations of future events that are believed tax expenses will be made following inspection by the tax to be reasonable under the circumstances. The Company makes authorities. estimates, assumptions and judgements concerning the future. Where the final tax outcome is different from the amounts that The resulting accounting estimates will, by definition, seldom were initially recorded, such differences will impact the income equal the related actual results. The estimates, assumptions and tax and deferred tax provisions in the period in which such judgements that have a significant risk of causing a material determination is made. adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. (c) Provident fund obligations
(a) Provision for bad and doubtful loans On an annual basis, the Company provides provident fund obligations equal to the specific percentage of December salary The Company is required to follow the mandatory credit of each fiscal year, based on the number of years the employee classification and provisioning in accordance with Prakas had work for the Company. This benefit is accumulated from No. B7-02-186 dated 13 September 2002 on the classification year to year. The Company adjusts the accumulated provident and provisioning for bad and doubtful debts. The Central fund obligations by annual inflation rate and staff turnover Bank requires microfinance institutions to classify their loan rate. The annual inflation rate represents Cambodia actual portfolios into four classes and ensure that the minimum average yearly inflation rate and staff turnover rate represents mandatory level of specific provision is made depending actual average staff resignation rate for the past three years, on the classification concerned and regardless of the assets determined by management. This adjustment is done in (except for cash) pledged as collateral. For the purpose of loan December for each year of service. classification, the Company is required to take into account the borrower’s historical payment experience and financial Management believes that the provident fund obligations condition. liability to date is adequate. In addition, the Company also makes a general risk provision (d) Functional currency by providing for any difference between 100% of the portfolio The Board of Directors considers the KHR the currency at risk (past due loans for 30 days or more) and the mandatory that most faithfully represents the economic effect of the specific level of provisioning as required by the Central Bank. underlying transactions, events and conditions. The KHR is the Management believes that this more reasonably reflect the currency in which the Company measures its performance and provision necessary to absorb risks relating to problems in the reports its results, as well as the currency in which it receives macroeconomic environment, natural disasters, and widespread subscriptions from and pays dividends to its shareholders. deterioration in rural household income, which would render customers incapable of reimbursing their outstanding loans.
Annual Report 2013 Microfinance Institution “Amret” 58 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
4. CASH ON HAND
2013 2012 KHR’000 Us$ KHR’000 Us$
Branches 43,337,918 10,848,039 20,143,425 5,042,159 Head office 7,085,115 1,773,496 1,648,987 412,763
50,423,033 12,621,535 21,792,412 5,454,922
5. BALANCES WITH THE CENTRAL BANK
2013 2012 KHR’000 Us$ KHR’000 Us$
Current accounts 48,836,904 12,224,507 23,258,068 5,821,794 Reserve requirement (i) 29,519,780 7,389,181 26,255,939 6,572,200 Statutory capital deposit (ii) 1,137,912 284,834 1,137,912 284,834
79,494,596 19,898,522 50,651,919 12,678,828
(i) Reserve requirement The reserve requirement represents the minimum reserve which is calculated at 8% of the total deposits from customers, as required by Prakas B7-07-163 on the Licensing of Deposit-Taking Microfinance Institutions. (ii) Statutory capital deposit In compliance with Prakas B7-07-163 dated 13 December 2007 on the Licensing of Deposit-Taking Microfinance Institutions, the Company is required to maintain a statutory capital deposit with the Central Bank of 10% of registered capital. This deposit is refundable should the Company voluntarily liquidate and have no deposit liabilities. (iii) Interest rates Reserve requirement and current accounts are non-interest bearing. The statutory capital deposit in US$ earns annual interest rate of 3% (2012: 3%).
Annual Report 2013 59 Microfinance Institution “Amret” Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
6. BALANCES WITH BANKS
2013 2012 KHR’000 Us$ KHR’000 Us$
Current accounts 24,439,084 6,117,418 12,582,056 3,149,451 Savings accounts 1,448 362 1,427 357
24,440,532 6,117,780 12,583,483 3,149,808
Current accounts are non-interest bearing. Annual interest rates on savings accounts are summarised as below:
2013 2012 Savings accounts 0.20% - 1.50% 0.20% - 1.50%
7. LOANS TO CUSTOMERS
2013 2012 KHR’000 Us$ KHR’000 Us$
Individual loans 592,709,639 148,362,863 388,516,955 97,250,802 Solidarity loans 217,514,179 54,446,603 202,464,166 50,679,391 Staff loans 3,887,755 973,155 3,598,282 900,696
814,111,573 203,782,621 594,579,403 148,830,889
Provision for bad and doubtful loans: Specific provision (155,674) (38,967) (211,029) (52,823) General provision (442,675) (110,807) (442,135) (110,672)
(598,349) (149,774) (653,164) (163,495)
813,513,224 203,632,847 593,926,239 148,667,394
Annual Report 2013 Microfinance Institution “Amret” 60 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
(a) Provision for bad and doubtful loans The movements in provision for bad and doubtful loans to customers are as follows:
2013 2012 KHR’000 Us$ KHR’000 Us$
At beginning of the year 653,164 163,495 295,219 73,091 Provision for the year 431,646 108,047 556,254 139,238 Bad debts written off (479,369) (119,992) (191,398) (47,909) Currency translation differences (7,092) (1,776) (6,911) (925)
At end of the year 598,349 149,774 653,164 163,495
(b) By economic sector
2013 2012 KHR’000 Us$ KHR’000 Us$
Agriculture 418,724,593 104,812,163 311,019,978 77,852,310 Trade and commerce 143,420,230 35,899,932 84,247,862 21,088,326 Construction 61,607,530 15,421,159 54,399,901 13,616,996 Services 49,751,780 12,453,512 38,268,410 9,579,076 Transportation 9,998,930 2,502,861 38,933,171 9,745,475 Other categories 130,608,510 32,692,994 67,710,081 16,948,706
814,111,573 203,782,621 594,579,403 148,830,889
(c) By relationship
2013 2012 KHR’000 Us$ KHR’000 Us$
External customers 810,223,818 202,809,466 590,981,122 147,930,193 Staff loans 3,887,755 973,155 3,598,281 900,696
814,111,573 203,782,621 594,579,403 148,830,889
Annual Report 2013 61 Microfinance Institution “Amret” Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
(d) By location
2013 2012 KHR’000 Us$ KHR’000 Us$
Takeo 108,183,434 27,079,707 83,722,718 20,956,876 Prey Veng 103,442,958 25,893,105 81,474,699 20,394,167 Kampot 100,834,374 25,240,143 77,715,091 19,453,089 Kampong Cham 99,736,040 24,965,217 84,609,957 21,178,963 Kandal 98,041,226 24,540,983 64,499,472 16,145,049 Kampong Speu 82,109,373 20,553,035 64,235,246 16,078,910 Svay Rieng 56,177,360 14,061,917 46,247,716 11,576,400 Phnom Penh 34,108,722 8,537,853 51,227,076 12,822,797 Kampong Thom 33,066,304 8,276,922 - - Kampong Chhnang 28,199,517 7,058,703 - - Siem Reap 28,130,044 7,041,313 27,440,213 6,868,639 Battambang 25,946,509 6,494,746 12,161,028 3,044,062 Banteaymeanchey 13,600,689 3,404,428 456,908 114,370 Head Office 2,535,023 634,549 789,279 197,567
814,111,573 203,782,621 594,579,403 148,830,889
Annual Report 2013 Microfinance Institution “Amret” 62 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
(e) By performance
2013 2012 KHR’000 Us$ KHR’000 Us$
Standard loans: Secured 596,067,894 149,203,478 391,584,566 98,018,665 Unsecured 217,445,329 54,429,369 202,341,672 50,648,729
Sub-standard loans: Secured 275,838 69,046 281,889 70,560 Unsecured 13,166 3,296 17,308 4,332
Doubtful loans: Secured 238,629 59,732 238,731 59,757 Unsecured 22,188 5,554 8,209 2,055
Loss loans: Secured 15,033 3,763 10,051 2,516 Unsecured 33,496 8,383 96,977 24,275
814,111,573 203,782,621 594,579,403 148,830,889
The secured loans are those loans secured in the form of land or house title receipts (which are not official land title deeds), as the Company generally issues loans to poor entrepreneurs in the provinces.
(f) interest rate The annual interest rates that were in operation during the year are as follows:
As at 31 December 2013 As at 31 December 2012
Loan in KHR 21.60% - 42% 30% - 42% Loan in US$ 14.40% - 37.20% 19.20% - 37.20% Loan in THB 24% - 36% - Biogas loans 14.40% 14.40% Staff loans 14.40% 14.40%
Annual Report 2013 63 Microfinance Institution “Amret” Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
8. OTHER ASSETS
2013 2012 KHR’000 Us$ KHR’000 Us$
Accrued interest receivable 11,864,982 2,969,958 8,939,770 2,237,740 Prepaid expenses 7,812,752 1,955,633 4,744,731 1,187,667 Deposits 773,302 193,567 145,404 36,396 Advances to staff 336,137 84,139 947,638 237,206 Accounts receivable 96,599 24,180 253,155 63,368 Others 131,742 32,977 297,410 74,446
21,015,514 5,260,454 15,328,108 3,836,823
Activities on the day of closing the Village Association (Kompong Tralach district, Kompong Chhnang province)
Annual Report 2013 Microfinance Institution “Amret” 64 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
9. PROPERTY AND EQUIPMENT
Office Office it Furniture Motor improvements equipment equipment and fittings vehicles total KHR’000 KHR’000 KHR’000 KHR’000 KHR’000 KHR’000
At 1 January 2012 Cost 1,989,948 1,809,345 3,318,524 491,173 3,130,690 10,739,680 Accumulated depreciation (942,527) (969,749) (2,297,687) (312,144) (1,886,874) (6,408,981) Net book value 1,047,421 839,596 1,020,837 179,029 1,243,816 4,330,699
Year ended 31 December 2012 Opening net book value 1,047,421 839,596 1,020,837 179,029 1,243,816 4,330,699 Additions 2,072,441 1,354,371 2,490,806 193,728 1,000,454 7,111,800 Disposals - (37,121) (2,394) - (2,061) (41,576) Depreciation charge (567,903) (605,217) (1,775,671) (113,263) (635,753) (3,697,807) Closing net book value 2,551,959 1,551,629 1,733,578 259,494 1,606,456 7,703,116
At 31 December 2012 Cost 4,062,389 3,012,844 5,674,956 681,996 4,000,939 17,433,124 Accumulated depreciation (1,510,430) (1,461,215) (3,941,378) (422,502) (2,394,483) (9,730,008)
Net book value 2,551,959 1,551,629 1,733,578 259,494 1,606,456 7,703,116
Equivalent in US$ 638,788 388,392 433,937 64,955 402,117 1,928,189
Annual Report 2013 65 Microfinance Institution “Amret” Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
Office Office it Furniture Motor improvements equipment equipment and fittings vehicles total KHR’000 KHR’000 KHR’000 KHR’000 KHR’000 KHR’000
At 1 January 2013 Cost 4,062,389 3,012,844 5,674,956 681,996 4,000,939 17,433,124 Accumulated depreciation (1,510,430) (1,461,215) (3,941,378) (422,502) (2,394,483) (9,730,008) Net book value 2,551,959 1,551,629 1,733,578 259,494 1,606,456 7,703,116
Year ended 31 December 2013 Opening net book value 2,551,959 1,551,629 1,733,578 259,494 1,606,456 7,703,116 Additions 1,874,760 1,523,422 988,083 118,300 1,251,418 5,755,983 Disposals (162,290) (18,246) (4,610) - - (185,146) Depreciation charge (771,830) (826,098) (1,382,863) (111,322) (839,252) (3,931,365) Closing net book value 3,492,599 2,230,707 1,334,188 266,472 2,018,622 9,342,588
At 31 December 2013 Cost 5,307,052 4,300,045 6,323,725 800,296 5,252,357 21,983,475 Accumulated depreciation (1,814,453) (2,069,338) (4,989,537) (533,824) (3,233,735) (12,640,887)
Net book value 3,492,599 2,230,707 1,334,188 266,472 2,018,622 9,342,588
Equivalent in US$ 874,243 558,375 333,964 66,701 505,287 2,338,570
Annual Report 2013 Microfinance Institution “Amret” 66 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
10. INTANGIBLE ASSETS Intangible assets consist of computer software cost and its license fee, with the details as follows:
Computer software Work in progress total KHR’000 KHR’000 KHR’000
At 1 January 2012 Cost 396,892 1,424,534 1,821,426 Accumulated amortisation (299,095) - (299,095) Net book value 97,797 1,424,534 1,522,331
Year ended 31 December 2012 Opening net book value 97,797 1,424,534 1,522,331 Transfers 1,424,534 (1,424,534) - Additions 490,331 - 490,331 Amortisation charge (210,012) - (210,012) Closing net book value 1,802,650 - 1,802,650
At 31 December 2012 Cost 2,311,757 - 2,311,757 Accumulated amortisation (509,107) - (509,107)
Net book value 1,802,650 - 1,802,650
Equivalent in US$ 451,227 - 451,227
Year ended 31 December 2013 Opening net book value 1,802,650 - 1,802,650 Written off (55,776) - (55,776) Amortisation charge (201,159) - (201,159) Closing net book value 1,545,715 - 1,545,715
At 31 December 2013 Cost 2,255,981 - 2,255,981 Accumulated amortisation (710,265) - (710,265)
Net book value 1,545,716 - 1,545,716
Equivalent in US$ 386,913 - 386,913
Annual Report 2013 67 Microfinance Institution “Amret” Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
11. TAXATION
(a) Deferred tax assets Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same tax authority. The following amounts, determined after appropriate offsetting, are shown in the balance sheet:
2013 2012 KHR’000 Us$ KHR’000 Us$
Deferred tax assets 2,148,191 537,720 1,800,032 450,571 Deferred tax liabilities (59,470) (14,886) (145,918) (36,525)
Deferred tax assets - net 2,088,721 522,834 1,654,114 414,046
The movements of net deferred tax assets are as follows:
2013 2012 KHR’000 Us$ KHR’000 Us$
As at 1 January 1,654,114 414,046 1,125,914 278,761 Credited to the income statement 434,607 108,788 528,200 132,215 Currency translation differences - - - 3,070
As at 31 December 2,088,721 522,834 1,654,114 414,046
Deferred tax assets
Provision Unrealised exchange loss total
As at 1 January 2012 1,282,315 - 1,282,315 Charged during the year 517,717 - 517,717 As at 31 December 2012 1,800,032 - 1,800,032 In US$ equivalent 450,571 - 450,571
As at 1 January 2013 1,800,032 - 1,800,032 Charged during the year 331,648 109,772 441,420 As at 31 December 2013 2,131,680 109,772 2,241,452 In US$ equivalent 533,587 27,477 561,064
Annual Report 2013 Microfinance Institution “Amret” 68 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
Deferred tax liabilities
Unrealised exchange gain Accelerated depreciation total KHR’000 KHR’000 KHR’000
As at 1 January 2012 (59,845) (96,556) (156,401) Charged during the year (33,416) 43,899 10,483 As at 31 December 2012 (93,261) (52,657) (145,918) In US$ equivalent (23,344) (13,181) (36,525)
As at 1 January 2013 (93,261) (52,657) (145,918) Charged during the year - (6,813) (6,813) As at 31 December 2013 (93,261) (59,470) (152,731) In US$ equivalent (23,344) (14,886) (38,230)
(b) Income tax expense
2013 2012 KHR’000 Us$ KHR’000 Us$
Current tax: Current tax on profit for the year 11,291,809 2,826,485 7,874,543 1,971,100 Adjustments in respect to prior years (96,144) (24,065) 373,626 93,523 Deferred tax (434,607) (108,788) (528,200) (132,215)
10,761,058 2,693,632 7,719,969 1,932,408
(i) Current income tax liabilities
2013 2012 KHR’000 Us$ KHR’000 Us$
At beginning of the year 6,521,114 1,632,319 5,222,122 1,292,924 Charge during the year 11,291,809 2,826,485 7,874,543 1,971,100 Income tax paid (8,233,691) (2,060,999) (69,949,177) (1,739,469) Adjustments in respect to prior years (96,144) (24,066) 373,626 93,523 Currency translation differences - - - 14,240
At end of the year 9,483,088 2,373,739 6,521,114 1,632,319
Annual Report 2013 69 Microfinance Institution “Amret” Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
(ii) Reconciliation between income tax expense and accounting profit
2013 2012 KHR’000 Us$ KHR’000 Us$
Profit before income tax 52,836,130 13,225,563 36,841,331 9,221,859
Tax calculated at a rate of 20% 10,567,226 2,645,113 7,368,266 1,844,372 Expenses not deductible for tax purposes 724,583 181,372 506,277 126,728
11,291,809 2,826,485 7,874,543 1,971,100 In accordance with Cambodian tax laws, the Company has an obligation to pay corporate income tax in the form of either Tax on Profit at the rate of 20% of taxable profit or minimum tax at 1% of turnover, whichever is higher. iii) Other tax matters The Company’s tax returns are subject to periodic examination by the General Department of Taxation (GDT). Some areas of tax laws and regulations may be open to different interpretation; therefore, the tax amounts reported in the financial statements could be changed at a later date upon final determination by the GDT. 12. DEPOSITS FROM CUSTOMERS
2013 2012 KHR’000 Us$ KHR’000 Us$
Term deposits 305,211,828 76,398,455 238,706,071 59,751,207 Savings deposits 71,777,645 17,966,870 94,832,102 23,737,698
376,989,473 94,365,325 333,538,173 83,488,905
Annual Report 2013 Microfinance Institution “Amret” 70 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
Annual interest rates for deposits denominated in KHR and US$ are as follows:
2013 2012 KHR Us$ tHB KHR Us$ Savings deposits 4% - 4.50% 3.50% - 4% 3%- 4.25% 4% - 4.50% 3.50% - 4% Term deposits-wealthy accounts 1-month term 6% 4.25% 5% 6% 4.25% 3-month term 5% - 7% 3.50% - 4.75% 5%- 6% 6.50% - 7% 4.25% - 4.75% 6-month term 6% -8.50% 4% - 5.75% 5.5%- 7% 7.50% -8.50% 4.75% - 5.75% 9-month term 7% - 9.50% 4.50% - 6.25% 6%- 7.5% 8% - 9.50% 5.75% - 6.25% 12/18/24/36-month term 8% - 10% 5% - 7.25% 6.5%- 8% 8.50% - 10% 6.25% - 7.25%
Term deposits-goal accounts 3 to 5-month term 6% - 6.50% 4.50% - 4.75% 5%- 5.5% 6% - 6.50% 4.50% - 4.75% 6 to 8-month term 6.50% -7.50% 5% - 5.50% 5.5%- 5.75% 6.5% -7.50% 5% - 5.50% 9 to 11-month term 7% - 8% 5.50% - 6% 6%- 6.25% 7% - 8% 5.50% - 6% 12 to 36-month term 7.50% -8.50% 6% - 7% 6.5%- 6.75% 7.50% -8.50% 6% - 7%
13. BORROWINGS
2013 2012 KHR’000 Us$ KHR’000 Us$ FMO 61,503,602 15,395,144 16,100,749 4,030,225 PlaNet Finance (i) 60,938,763 15,253,758 26,966,238 6,749,997 Microfinance Enhancement Facility 47,939,979 11,999,995 11,984,995 2,999,999 Instituto De Credito Oficial 38,431,564 9,619,916 38,431,564 9,619,916 Microfinance Loan Obligations S.A (ii) 35,954,984 8,999,996 11,984,995 2,999,999 Oikocredit 33,347,489 8,347,306 15,580,000 3,899,875 The OPEC Fund for International Development 29,740,557 7,444,445 33,291,663 8,333,332 BlueOrchard (iii) 23,969,990 5,999,997 - - Global Microfinance Facility 19,974,991 4,999,998 19,974,991 4,999,998 Triodos Investment Management 16,984,995 4,251,563 16,984,995 4,251,563 Norwegian Investment Fund for Developing Countries 15,979,993 3,999,998 - - ICBC 11,984,994 2,999,999 - - Proparco 6,658,331 1,666,666 9,321,663 2,333,332
403,410,232 100,978,781 200,621,853 50,218,236
Annual Report 2013 71 Microfinance Institution “Amret” Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
(i) ResponsAbility is the fund manager acting on behalf of its note holders which include ResponsAbility Sicav (Lux), Credit Suisse Microfinance Fund Management Company, ResponsAbility Fair Trade Fund and Natixis Impact Nord Sud Development with total outstanding balance of KHR60,938,763 thousand equivalent to US$15,253,758.
Note holders Date of agreement KHR’000 Us$
ResponsAbility Sicav (Lux) 31 Jan 2012 18 Jun 2012 16 Jan 2013 04 Mar 2013 17 May 2013 04 Jun 2013 07 Nov 2013 25,383,271 6,353,760 Credit Suisse Microfinance 05 Mar 2012 Fund Management 18 Jun 2012 Company 16 Jan 2013 18 Mar 2013 02 July 2013 01 Nov 2013 27 Dec 2013 26,566,742 6,649,998 ResponsAbility Fair Trade Fund 01 Aug 2013 5,992,500 1,500,000 Natixis Impact Nord Sud Development 12 Dec 2013 2,996,250 750,000
60,938,763 15,253,758
(ii) Microfinance Loan Obligations S.A is the fund manager acting on behalf of its note holders Finethic S.Q.A. SICAV-SIF, Sub-Fund - Finethic – Microfinance, EMF Microfinance Fund AGmvK, Wallberg Invest S.A , Dual Return Fund S.I.C.A.V., Symbiotics Sicav (Lux) and Finethic Microfinance, Societe en Commandite par Action (S.C.A) with total outstanding of KHR35,954,984 thousand equivalent to US$ 8,999,996.
Annual Report 2013 Microfinance Institution “Amret” 72 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
Note holders Date of agreement KHR’000 Us$
Finethic S.Q.A. SICAV-SIF, 27 May 2013 Sub-Fund - Finethic – Microfinance 29 Nov 2013 8,988,748 2,249,999
EMF Microfinance Fund AGmvK 13 Feb 2013 16 May 2013 09 Dec 2013 6,991,247 1,749,999 Wallberg Invest S.A 09 Dec 2013 20 Dec 2013 4,993,747 1,249,999 Dual Return Fund S.I.C.A.V 20 Feb 2013 29 Nov 2013 3,994,998 1,000,000 Symbiotics Sicav (Lux) 03 Dec 2013 16 Dec 2013 7,989,995 1,999,999 Finethic Microfinance, Societe en Commandite par Action (S.C.A,) 16 May 2012 2,996,249 750,000
35,954,984 8,999,996
(iii) BlueOrchard is the fund manager acting on behalf of its note holders BlueOrchard Microfinance Fund and Microfinance Initiative For Asia (MIFA) Debt Fund SA, SICAV-SIF with total outstanding balance of KHR23,969,990 thousand equivalent to US$ 5,999,997.
Note holders Date of agreement KHR’000 Us$ BlueOrchard Microfinance 11 Feb 2013 Fund 26 Mar 2013 06 Jun 2013 17,977,490 4,499,997 Microfinance Initiative For Asia (MIFA) Debt Fund SA, SICAV-SIF 06 Jun 2013 5,992,500 1,500,000
23,969,990 5,999,997
Annual Report 2013 73 Microfinance Institution “Amret” Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
Borrowings bear annual interest at rates ranging from 4% to 11.50% (31 December 2013: 4.65% to 13.37%). None of the Company’s borrowings are secured.
The Company has no defaults on principal, interest or redemption amounts. 14. OTHER LIABILITIES
2013 2012 KHR’000 Us$ KHR’000 Us$
Accrued interest payables 15,439,564 3,864,722 10,408,445 2,605,368 Accrued bonus and incentives 5,282,543 1,322,289 4,234,340 1,059,910 Accrued operating expenses 2,110,317 528,240 1,685,022 421,783 Accrued commissions expenses 2,017,216 504,935 2,115,393 529,510 Withholding tax payable 1,045,266 261,644 309,619 77,502 Payable to staff association 418,469 104,748 288,863 72,306 Others 158,134 39,582 16,838 4,215
26,471,509 6,626,160 19,058,520 4,770,594
15. PROVIDENT FUND OBLIGATIONS
2013 2012 KHR’000 Us$ KHR’000 Us$
Provident fund obligations 10,658,402 2,667,935 8,558,027 2,142,184
The movements in the provision for provident fund obligations for the year are as follows:
2013 2012 KHR’000 Us$ KHR’000 Us$
At beginning of the year 8,558,027 2,142,184 6,247,135 1,546,703 Additions during the year (Note 21) 2,546,697 637,471 2,445,922 612,245 Payments during the year (446,322) (111,720) (135,030) (33,800) Currency translation differences - - - 17,036
At end of the year 10,658,402 2,667,935 8,558,027 2,142,184
Annual Report 2013 Microfinance Institution “Amret” 74 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
16. SUBORDINATED DEBT This resulted from the transfer of the credit fund, liabilities and reserves as at 30 June 2000 granted by Agence Française de Dévéloppement (AFD) to the Company. The terms and conditions of the subordinated debt agreement dated 27 December 2000 between the MoEF and the Company are as follows: The subordinated debt will not be repayable to the MoEF unless the Company ceases to provide credit to the rural population of Cambodia or unless it decides to repay all or part of the debt. MoEF appointed the Rural Development Bank (RDB) to supervise the use and the disbursements of the subordinated debt by the Company. Interest would be paid neither to MoEF nor National Bank of Cambodia, nor to RDB. However, in the scope of the supervision exercised by RDB, the Company has to pay annual management fee to RDB at the end of each financial year, calculated based on the prorata correspond to 0.5% of the subordinated debt. The debt is considered as “Tier II Capital” in the context of Prakas No. B7-00-006 issued by the Central Bank, and shall be included in computing the Company’s capital adequacy ratio. 17. SHARE CAPITAL
Share capital
2013 2012 KHR’000 Us$ KHR’000 Us$
Advans 5,055,120 1,265,361 5,055,120 1,265,361 GRET 2,207,280 552,511 2,207,280 552,511 Proparco 1,972,000 493,617 1,972,000 493,617 FMO 1,436,160 359,489 1,436,160 359,489 La Fayette Participations S.A.S 462,400 115,745 462,400 115,745 Botta Co., Ltd 246,160 61,617 246,160 61,617
11,379,120 2,848,340 11,379,120 2,848,340
Annual Report 2013 75 Microfinance Institution “Amret” Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
Ownership and number of shares are presented as below:
2013 2012 ownership shares ownership shares
Advans 45% 3,717 45% 3,717 GRET 19% 1,623 19% 1,623 Proparco 17% 1,450 17% 1,450 FMO 13% 1,056 13% 1,056 La Fayette Participations S.A.S 4% 340 4% 340 Botta Co., Ltd 2% 181 2% 181
100% 8,367 100% 8,367
The total authorised number of ordinary shares at year end was 8,367 shares (2012: 8,367 shares) with a par value of KHR 1,360 thousand (2012: KHR 1,360 thousand) per share. All issued shares are fully paid. 18. INTEREST INCOME
2013 2012 KHR’000 Us$ KHR’000 Us$
Individual loans 122,544,922 30,674,574 78,657,499 19,688,986 Solidarity loans 75,781,724 18,969,142 69,359,301 17,361,527 Balances with the Central Bank 34,137 8,545 37,509 9,389 Balances with banks 28,297 7,083 163,599 40,951
198,389,080 49,659,344 148,217,908 37,100,853
19. INTEREST EXPENSES
2013 2012 KHR’000 Us$ KHR’000 Us$
Deposits from customers 23,899,931 5,982,461 17,858,201 4,470,138 Borrowings 22,324,429 5,588,092 15,146,947 3,791,476
46,224,360 11,570,553 33,005,148 8,261,614
Annual Report 2013 Microfinance Institution “Amret” 76 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
20. OTHER INCOME
2013 2012 KHR’000 Us$ KHR’000 Us$
Recoveries from bad loans 1,028,323 257,403 1,284,220 321,457 Fees and commission income 510,300 127,735 557,615 139,578 Penalty income 112,571 28,178 119,355 29,876 Loss on disposals of property and equipment (154,333) (38,632) (19,223) (4,812) Foreign exchange - gain 64,504 16,146 466,306 116,722 Others 81,688 20,447 69,675 17,441
1,643,053 411,277 2,477,948 620,262
21. PERSONNEL EXPENSES
2013 2012 KHR’000 Us$ KHR’000 Us$
Salaries and wages 39,408,297 9,864,405 27,786,397 6,955,293 Incentive expenses 7,961,581 1,992,886 7,631,999 1,910,388 Employee training expenses 3,251,373 813,861 2,468,358 617,862 Provident fund expenses (Note 15) 2,546,697 637,471 2,445,922 612,245 Other employee benefits 2,273,807 569,163 2,064,645 516,809 Directors’ fees (Note 27 (b)) 401,340 100,461 288,276 72,159 Medical expenses 36,523 9,142 26,748 6,695
55,879,618 13,987,389 42,712,345 10,691,451
22. DEPRECIATION AND AMORTISATION CHARGE
2013 2012 KHR’000 Us$ KHR’000 Us$
Depreciation (Note 9) 3,931,365 984,071 3,697,807 925,608 Amortisation (Note 10) 201,159 50,353 210,012 52,569
4,132,524 1,034,424 3,907,819 978,177
Annual Report 2013 77 Microfinance Institution “Amret” Activities of Amret’s clients making Prahok strainers (Rolea B’ier district, Kompong Chhnang province) Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
23. GENERAL AND ADMINISTRATION EXPENSES
2013 2012 KHR’000 Us$ KHR’000 Us$
Fees and commission expenses 5,654,204 1,415,320 5,164,205 1,292,667 Business trip expenses 5,321,351 1,332,003 3,792,668 949,354 Motor vehicle and running costs 5,240,967 1,311,882 4,351,352 1,089,199 Rental expenses 5,232,028 1,309,644 4,011,365 1,004,096 Professional costs 5,084,468 1,272,708 5,459,304 1,366,534 Marketing and advertising costs 3,439,056 860,840 2,627,093 657,595 Office supplies expenses 2,822,219 706,438 2,335,793 584,679 Communication expenses 1,543,446 386,344 858,259 214,833 Utilities expenses 1,317,520 329,792 1,041,352 260,664 Insurance expenses 1,247,292 312,213 674,075 168,730 Repair and maintenances expenses 708,441 177,332 539,303 134,994 Printing expenses 631,704 158,124 601,221 150,493 Business and public relation expenses 492,108 123,181 375,896 94,092 Bank charges 359,511 89,990 250,476 62,697 Security expenses 269,523 67,465 150,604 37,698 License and patent fees 220,181 55,114 97,609 24,433 Management fee on subordinated debt 20,165 5,048 20,165 5,048 Others 1,366,346 342,014 1,322,219 330,970
40,970,530 10,255,452 33,672,959 8,428,776
24. GRANT INCOME The Company received Agriculture Finance Support Facility Grant from the World Bank with the objective to develop the Company’s capacity in agricultural lending and increase rural outreach with adequate financial services, including deposits. The Grant period is from 8 April 2013, and has a closing date of 30 September 2014 with total grant amount not exceeding US$730,000 on which the Company will be reimbursed based on eligible expenditures. During the year, grant amounting to KHR 442,675 thousand equivalent to US$110,087 (2012: nil) was reimbursed and recorded as grant income.
Annual Report 2013 79 Microfinance Institution “Amret” Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
25. CASH USED IN OPERATIONS
2013 2012 KHR’000 Us$ KHR’000 Us$
Profit before income tax 52,836,130 13,225,563 36,841,331 9,221,859 Adjustments for: Provision for bad and doubtful loans (Note 7) 431,646 108,047 556,254 139,238 Depreciation and amortisation charge (Note 22) 4,132,524 1,034,424 3,907,819 978,177 Written off of intangible assets (Note 10) 55,776 13,961 - - Loss on disposals of property and equipment 154,333 38,632 19,223 4,812 Provident fund expenses (Note 15) 2,546,697 637,471 2,445,922 612,245 Net interest income and expenses (152,164,720) (38,088,791) (115,212,760) (28,839,238) Grant income (442,675) (110,807) - - Operating profit before changes in operating assets and liabilities (92,450,289) (23,141,500) (71,442,211) (17,882,907) Changes in operating assets and liabilities: Loans to customers (220,018,631) (55,073,500) (195,713,022) (48,989,492) Balances with banks - - 18,175,500 4,549,562 Other assets (2,665,595) (667,233) (1,309,375) (327,753) Deposits from customers 43,451,300 10,876,421 163,464,621 40,917,302 Other liabilities 2,471,785 618,720 2,180,680 545,852
Cash used in operations (269,211,430) (67,387,092) (84,643,807) (21,187,436)
26. CASH AND CASH EQUIVALENT
2013 2012 KHR’000 Us$ KHR’000 Us$
Cash on hand 50,423,033 12,621,535 21,792,412 5,454,922 Balances with the Central Bank – current accounts (Note 5) 48,836,904 12,224,507 23,258,068 5,821,794 Balances with banks (Note 6) 24,440,532 6,117,780 12,583,483 3,149,808
123,700,469 30,963,822 57,633,963 14,426,524
Annual Report 2013 Microfinance Institution “Amret” 80 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
27. RELATED PARTY TRANSACTIONS AND BALANCES The Company entered into a number of transactions with related parties in the normal course of business. The volumes of related party transactions, outstanding balances at the year end, and related expense and income for the year are as follows:
(a) Related parties balance:
2013 2012 KHR’000 Us$ KHR’000 Us$
Directors and key management Deposits a 521,656 130,577 2,209,869 553,159 Loans b 490,896 122,878 617,784 154,639
Shareholders Borrowings from: FMO c 61,503,602 15,395,144 16,100,748 4,030,225 Proparco d 6,658,331 1,666,666 9,321,663 2,333,332
68,161,933 17,061,810 25,422,411 6,363,557
a) Deposits from related party have the same term and annual interest rate to deposit from customers as described in Note 12. b) Loans to related party have a two to four years term with the annual interest rate of 14.4%. c) Borrowings from FMO represent a seven years term maturing on 14 April 2017 with the annual interest rate of 4.65%, a three years term maturing on 15 December 2015 with the annual interest rate of 10.63% and a four and half years term maturing on 15 April 2018 with the annual interest rate of 7.72%. d) Borrowing from Propaco has a seven and half years term maturing on 31 March 2016 with the annual interest rate of 8.87%.
Annual Report 2013 81 Microfinance Institution “Amret” Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
(b) Related parties transactions
2013 2012 KHR’000 Us$ KHR’000 Us$
Board of Directors: Fees 401,340 100,461 288,276 72,159
Shareholders: interest expense 4,344,892 1,087,582 3,875,916 970,192 Consultant fee expenses 147,689 36,968 87,201 21,828
Entity related to Board of Directors: Consultant fee expenses 1,801,309 450,891 1,259,249 315,206
(c) Key management compensation
2013 2012 KHR’000 Us$ KHR’000 Us$
Salaries and other short-term employee benefits 3,954,173 989,780 2,383,757 596,685 Provident fund expenses 1,409,210 352,743 1,131,896 283,328
5,363,383 1,342,523 3,515,653 880,013
28. COMMITMENTS
Operating lease commitments These operating leases mainly relate to the office rental, which is renewable upon mutual agreement. Where the Company is the lessee, he future minimum lease payments under non-cancellable operating leases are as follows:
2013 2012 KHR’000 Us$ KHR’000 Us$
No later than one year 6,889,441 1,724,516 3,848,100 963,229 Later than one year and no later than five years 21,359,711 5,346,611 10,809,903 2,705,858 Later than five years 10,394,315 2,601,831 3,526,978 882,848
38,643,467 9,672,958 18,184,981 4,551,935
Annual Report 2013 Microfinance Institution “Amret” 82 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
29. FINANCIAL RISK MANAGEMENT The Company’s activities expose it to a variety of financial risks: credit risk, market risk (including currency risk, interest rate risk and price risk), and liquidity risk. Taking risks is core to the financial business, and the operational risks are an inevitable consequence of being in business. The Company does not use derivative financial instruments such as foreign exchange contracts and interest rate swaps to manage its risk exposures. The Company hold the following financial assets and liabilities as follows:
2013 2012 KHR’000 Us$ KHR’000 Us$
Financial assets Cash on hand 50,423,033 12,621,535 21,792,412 5,454,922 Balances with the Central Bank 78,356,684 19,613,688 49,514,007 12,393,994 Balances with banks 24,440,532 6,117,780 12,583,483 3,149,808 Loans to customers (*) 814,111,573 203,782,622 594,579,403 148,830,889 Other assets 12,297,718 3,078,277 10,140,563 2,538,314 Total financial assets 979,629,540 245,213,902 688,609,868 172,367,927
Financial liabilities Deposits from customers 376,989,473 94,365,325 333,538,173 83,488,904 Borrowings 403,410,232 100,978,781 200,621,853 50,218,236 Other liabilities 25,263,449 6,323,767 18,732,063 4,688,877 Total financial liabilities 805,663,154 201,667,873 552,892,089 138,396,017
Net financial assets 173,966,386 43,546,029 135,717,779 33,971,910
29.1 Credit risk The Company takes on exposure to credit risk, which is the risk that counterparties will cause a financial loss to the Company by failing to discharge an obligation. Credit risk is the most important risk for the Company’s business. Credit exposure arises principally in lending activities that lead to loans to customers and balances with banks. There is also credit risk in off-balance sheet financial instruments, such as loan commitments. The credit risk management is carried out by the Company’s credit committee. The lending activities are guided by the Company’s credit policy to ensure that the overall objectives in the area of lending are achieved; i.e., that the loan portfolio is strong and healthy and credit risks are well diversified. The credit policy documents the lending policy, collateral policy, and credit approval processes and procedures implemented to ensure compliance with the Central Bank guidelines.
Annual Report 2013 83 Microfinance Institution “Amret” Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
(a) Credit risk measurement The Company assesses the probability of default of individual counterparties by focusing on borrowers’ forecast profit and cash flows. The credit committee is responsible for approving loans to customers. (b) Risk limit control and mitigation policies The Company operates and provides loans to individuals or small-medium enterprises within the Kingdom of Cambodia. The Company manages limits and controls the concentration of credit risk whenever it is identified. The Company employs a range of policies and practices to mitigate credit risk. The most traditional of these is the taking of security in the form of collateral for loans to customers, which is common practice. The Company implements guidelines on the acceptability of specific classes of collateral or credit risk mitigation. (c) Impairment and provisioning policies The Company is required to follow the mandatory credit classification and provisioning in accordance with Prakas B7-02-186 dated 13 September 2002 on loan classification and provisioning. The Central Bank requires microfinance institutions to classify their loan portfolio into four classes and ensure that the minimum mandatory level of specific provision is made depending on the classification concerned and regardless of the assets (except for cash) pledged as collateral, as follows:
Percentage of provision
Standard 0% Substandard 10% Doubtful 30% Loss 100%
(d) Maximum exposure to credit risk before collateral held or other credit enhancements
2013 2012 KHR’000 Us$ KHR’000 Us$
Credit exposure relating to on-balance sheet assets: Loans to customers (Note 7) 814,111,573 203,782,621 594,579,403 148,830,889 Balances with banks (Note 6) 24,440,532 6,117,780 12,583,483 3,149,808 Other assets 12,297,718 3,271,843 10,140,563 2,574,710
850,849,823 213,172,244 617,303,449 154,555,407
Annual Report 2013 Microfinance Institution “Amret” 84 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
The above table represents a worst case scenario for credit risk exposure to the Company at 31 December 2013 and 2012, without taking into account any collateral held or other credit enhancement attached. For on-balance sheet assets, the exposure set out above is based on net carrying amounts. As shown above, 96% of total maximum exposure is derived from loans to customers (2012: 96%). Management is confident in its ability to continue to control and sustain minimal credit risk exposure to the Company relating to its loans to customers on the following basis: • 99% of the loans in the portfolio are considered to be neither past due nor impaired (2012: 99%) • The Company has introduced a more stringent selection and collection process for granting loans to customers (e) Loans to customers Loans to customers are summarised as follows:
2013 2012 KHR’000 Us$ KHR’000 Us$
Loans to customers neither past due nor impaired 811,419,999 203,108,885 593,094,208 148,459,126 Loans to customers past due but not impaired 2,093,223 523,962 832,031 208,268 Loans to customers individually impaired 598,351 149,774 653,164 163,495 Gross loan to customers 814,111,573 203,782,621 594,579,403 148,830,889
Provision for bad and doubtful loans (598,349) (149,774) (653,164) (163,495)
Net loans to customers 813,513,224 203,632,847 593,926,239 148,667,394 For the purpose of loan provisioning, the expected recovery from collateral (except cash) is not taken into consideration in accordance with the Central Bank’s requirements. The total provision for bad and doubtful loans is KHR 598,351 thousand (2012: KHR 653,164 thousand), which represents the specific provision required by the Central Bank and additional provision for the loan losses. (i) Loans to customers neither past due nor impaired Loans to customers not past due are not considered impaired, unless other information is available to indicate the contrary. (ii) Loans to customers past due but not impaired Loans to customers less than 30 days past due are not considered impaired, unless other information is available to indicate the contrary. Gross amount of loans to customers that were past due but not impaired are as follows:
Annual Report 2013 85 Microfinance Institution “Amret” Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
2013 2012 KHR’000 Us$ KHR’000 Us$
Past due up to 30 days 2,093,223 523,962 832,031 208,268
(iii) Loans to customers individually impaired In accordance with Prakas B7-02-186 dated 13 September 2002 on loan classification and provisioning, loans past due more than 30 days are considered impaired and a minimum level of specific provision for impairment is made depending on the classification concerned, unless other information is available to indicate the contrary.
2013 2012 KHR’000 Us$ KHR’000 Us$
Past due 30-60 days 173,968 43,546 104,000 26,033 Past due 60-90 days 45,492 11,387 95,442 23,890 Past due 90-180 days 96,794 24,229 176,602 44,206 Past due 180-360 days 282,095 70,612 277,120 69,366
598,349 149,774 653,164 163,495
Most of the customers’ collateral is in the form of land or house title receipts (which are not official land title deeds), as the Company generally issues loans to low income entrepreneurs in the provinces. The Company does not perform, during the period of loan, a revaluation of collateral either internally or externally. Since no legal official land title deeds have been obtained, no values have been ascribed to the collateral. Under the Central Bank’s regulations, the value of collateral is not taken into account when determining the impairment of loans to customers. (iv) Loans to customers renegotiated There were no renegotiated loans to customers at 31 December 2013 (2012: nil). (f) Balances with banks The Company deposits short term excess liquidity with other banks leading to counter party risk exposure. The Company manages counter party risk exposure by performing due diligence on individual counter parties, having counterparty limits and diversifying the deposits to different banks. (g) Repossessed collateral During the year ended 31 December 2013, the Company did not obtain any assets by taking possession of collateral held as security (2012: nil).
Annual Report 2013 Microfinance Institution “Amret” 86 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
29.2 Market risk The Company takes on exposure to market risk, which is the risk that the fair value or future cash flows of financial instruments will fluctuate because of changes in market prices. Market risk arises from open positions in interest rates, currency and equity products, all of which are exposed to general and specific market movements and changes in the level of volatility of market rates or prices such as interest rates, credit spreads, foreign exchange rates and equity prices. (i) Foreign exchange risk The Company operates in Cambodia and transacts in KHR, US$, and THB and is exposed to currency risks, primarily with respect to US$ and THB. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Company’s functional currency. Management monitors its foreign exchange risk against functional currencies through monitoring the foreign exchange risk by using the absorbed risk of 20% of the net worth required by the Central Bank. The table below summarises the Company’s exposure to foreign currency exchange rate risk at 31 December 2013. Included in the table are the Company’s financial instruments at carrying amount by currency in KHR’000 equivalent.
KHR’000 equivalents KHR’000 Us$ tHB total
As at 31 December 2013 Financial assets Cash on hand 18,453,922 31,705,005 264,106 50,423,033 Balances with the Central Bank 37,540,467 40,816,217 - 78,356,684 Balances with banks 7,401,788 12,966,011 4,072,733 24,440,532 Loans to customers (*) 269,992,077 543,981,514 137,982 814,111,573 Other assets 5,468,559 6,828,655 504 12,297,718 Total financial assets 338,856,813 636,297,402 4,475,325 979,629,540
Financial liabilities Deposits from customers 147,055,016 229,734,290 200,167 376,989,473 Borrowings 20,450,500 378,949,694 4,010,038 403,410,232 Other liabilities 13,172,602 12,090,847 - 25,263,449 Total financial liabilities 180,678,118 620,774,831 4,210,205 805,663,154
Net financial assets 158,178,695 15,522,571 265,120 173,966,386
Annual Report 2013 87 Microfinance Institution “Amret” Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
KHR’000 equivalents KHR’000 Us$ total
As at 31 December 2012 Financial assets Cash on hand 10,216,189 11,576,223 21,792,412 Balances with the Central Bank 19,458,168 30,055,839 49,514,007 Balances with banks 3,530,469 9,053,014 12,583,483 Loans to customers (*) 249,642,880 344,936,523 594,579,403 Other assets 5,663,245 4,477,318 10,140,563 Total financial assets 288,510,951 400,098,917 688,609,868
Financial liabilities Deposits from customers 99,805,063 233,733,110 333,538,173 Borrowings 32,685,750 167,936,103 200,621,853 Other liabilities 10,595,815 8,136,248 18,732,063 Total financial liabilities 143,086,628 409,805,461 552,892,089
Net financial assets 145,424,323 (9,706,544) 135,717,779 (*) This represents the gross loan excluding provision for bad and doubtful loan. (ii) Price risk The Company is not exposed to a securities price risk because it does not have any investment held and classified on the balance sheet either as available for sale or at fair value through profit or loss. The Company does not currently have a policy to manage its price risk. (iii) Interest rate risk Cash flows interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate because of changes in market interest rates. Interest margins may increase as a result of changes but may reduce losses in the event that unexpected movements arise. The Company at this stage does not have a policy to set limits on the level of mismatch of interest rate repricing that may be undertaken; however, management regularly monitors the mismatch. The table below summarises the Company’s exposure to interest rate risks. It includes the Company’s financial instruments at the carrying amounts, categorised by the earlier of contractual repricing or maturity dates.
Annual Report 2013 Microfinance Institution “Amret” 88 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
Up to 1 – 3 3 – 12 1 – 5 Over 5 Non-interest 1 month months months years Years bearing total KHR’000 KHR’000 KHR’000 KHR’000 KHR’000 KHR’000 KHR’000
As at 31 December 2013 Assets Cash on hand - - - - - 50,423,033 50,423,033 Balances with the Central Bank - - - - - 78,356,684 78,356,684 Balances with banks - - - - - 24,439,084 24,439,084 Loans to customers 9,823,203 43,222,142 248,706,177 512,360,051 - - 814,111,573 Other assets - - - - - 12,297,718 12,297,718 Total financial assets 9,823,203 43,222,142 248,706,177 512,360,051 - 165,516,519 979,628,092
Liabilities Deposits from customers 103,355,984 57,002,061 210,347,390 6,284,038 - - 376,989,473 Borrowings 3,995,000 26,045,361 79,285,439 269,784,252 24,300,180 - 403,410,232 Other liabilities - - - - - 25,268,109 25,268,109 Total financial liabilities 107,350,984 83,047,422 289,632,829 276,068,290 24,300,180 25,268,109 805,667,814 Total interest repricing gap (97,527,781) (39,825,280) (40,926,652) 236,291,761 (24,300,180) 140,248,410 173,960,278
As at 31 December 2012 Assets Cash on hand - - - - - 21,792,412 21,792,412 Balances with the Central Bank - - - - - 49,514,007 49,514,007 Balances with banks - - - - - 12,583,483 12,583,483 Loans to customers 9,734,035 43,292,638 217,090,337 324,462,393 - - 594,579,403 Other assets - - - - - 10,140,563 10,140,563 Total financial assets 9,734,035 43,292,638 217,090,337 324,462,393 - 94,030,465 688,609,868
Liabilities Deposits from customers 89,394,588 63,698,651 172,972,894 7,472,040 - - 333,538,173 Borrowings - 13,557,216 25,724,338 128,092,421 33,247,878 - 200,621,853 Other liabilities - - - - - 18,732,063 18,732,063 Total financial liabilities 89,394,588 77,255,867 198,697,232 135,564,461 33,247,878 18,732,063 552,892,089 Total interest repricing gap (79,660,553) (33,963,229) 18,393,105 188,897,932 (33,247,878) 75,298,402 135,717,779
Annual Report 2013 89 Microfinance Institution “Amret” Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
29.3 Liquidity risk Liquidity risk is the risk of the Company being unable to meet its payment obligations associated with its financial liabilities when they fall due and to replace funds when they are withdrawn. The consequence of this may be the failure to meet obligations to repay depositors and fulfil commitments to lend. (a) Liquidity risk management process The Company’s management monitors balance sheet liquidity and manages the concentration and profile of debt maturities. Monitoring and reporting take the form of the reviewing of the daily cash position and projections for the next day, week and month, as these are key periods for liquidity management. Management monitors the movement of the main depositors and lenders and projections of their withdrawals. (b) Funding approach The Company’s main sources of liquidity arise from the shareholders’ paid-up capital, borrowings and customers’ deposits. The sources of liquidity are reviewed regularly through management’s review of the maturity of term deposits, key depositors, borrowings and subordinated debts. (c) Non-derivative cash flows The table on the following page presents the cash flows payable by the Company under non-derivative financial liabilities by remaining contractual maturities at the balance sheet date. The amounts disclosed in the table are the contractual undiscounted cash flows, whereas the Company manages the inherent liquidity risk based on the expected undiscounted cash flows.
Annual Report 2013 Microfinance Institution “Amret” 90 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
Up to 1 – 3 3 – 12 1 – 5 Over 5 No fixed 1 month months months years years terms total KHR’000 KHR’000 KHR’000 KHR’000 KHR’000 KHR’000 KHR’000
As at 31 December 2013 Liabilities Deposits from customers 103,461,188 57,704,154 220,888,173 7,438,244 - - 389,491,759 Borrowings 7,180,963 30,232,013 97,837,586 305,966,381 26,280,091 - 467,497,034 Other liabilities 2,110,317 5,282,543 17,456,780 - 418,469 - 25,268,109 Total financial liabilities (contractual maturing dates) 112,752,468 93,218,710 336,182,539 313,404,625 26,698,560 - 882,256,902 Total financial assets (contractual maturing dates) 194,152,399 130,820,525 548,538,123 252,208,605 29,519,780 - 1,155,239,433
As at 31 December 2012 Liabilities Deposits from customers 97,477,911 90,637,556 516,431,977 60,203,122 - - 764,750,566 Borrowings 702,577 16,437,350 37,266,835 150,176,188 36,668,435 - 241,251,385 Other liabilities 1,685,022 4,234,340 12,523,838 - 288,863 - 18,732,063 Total financial liabilities (contractual maturing dates) 99,865,510 111,309,246 566,222,650 210,379,310 36,957,298 - 1,024,734,014 Total financial assets (contractual maturing dates) 115,770,073 107,234,625 399,099,966 167,707,922 26,255,939 - 816,068,673
(d) Off-balance sheet items Operating lease commitments Where the Company is the lessee, the future minimum lease payments under non-cancellable operating leases are as disclosed in Note 28.
29.4 Fair value of financial assets and liabilities (a) Financial instruments measured at fair value The Company does not have any financial instruments measured at fair value. (b) Financial instruments not measured at fair value The table below summarises the carrying amounts and fair value of those financial assets and liabilities not presented on the Company’s balance sheet at their fair value.
Annual Report 2013 91 Microfinance Institution “Amret” Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013
Carrying value Fair value 2013 2012 2013 2012 KHR’000 KHR’000 KHR’000 KHR’000
Financial assets Balances with the Central Bank 78,356,684 49,514,007 78,356,684 49,514,007 Balances with banks 24,440,532 12,583,483 24,440,532 12,583,483 Loans to customers (*) 814,111,573 594,579,403 814,111,573 594,579,403 Other assets 12,297,718 10,140,563 12,297,718 10,140,563
929,206,507 666,817,456 929,206,507 666,817,456
Financial liabilities Deposits from customers 376,989,473 333,538,173 376,989,473 333,538,173 Borrowings 403,410,232 200,621,853 403,410,232 200,621,853 Other liabilities 25,263,449 18,732,063 25,263,449 18,732,063
805,663,154 552,892,089 805,663,154 552,892,089 (*) This represents the gross loan excluding provision for bad and doubtful loan. i. Balances with the Central Bank Balances with the Central Bank include current accounts and fixed deposits. The fair value of balances with the Central Bank approximates the carrying amount. ii. Balances with banks Balances with banks include non-interest bearing current accounts, and savings accounts. The fair value of balances with banks approximates the carrying amount. iii. Loans to customers Loans to customers are net of provision for bad and doubtful loans and their carrying value approximates fair value. The provision for bad and doubtful loans is made under the requirements of the Central Bank’s Prakas. iv. Deposits from customers The fair value of deposits from customers approximates the carrying amount. The fair value of deposits from customers with no stated maturities is the amount repayable on demand. The fair value of fixed interest-bearing deposits are not quoted in an active market. Their value approximates the carrying amount.
Annual Report 2013 Microfinance Institution “Amret” 92 Notes To The Financial Statements (Cont.) For The Year Ended 31 December 2013 v. Other assets and other liabilities The carrying amount of other financial assets and other financial liabilities are assumed to approximate their fair values as these items are not materiality sensitive to the shift in market interest rates.
29.5 Capital management The Company’s objectives when managing capital, which is a broader concept than the ‘equity’ on the face of the balance sheet, are: • To comply with the capital requirements set by the Central Bank; • To safeguard the Company’s ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders; and • To maintain a strong capital base to support the development of the business. The Central Bank requires all licensed deposit-taking microfinance institutions to i) fulfil the minimum capital requirements, and ii) comply with solvency, liquidity and other requirements. The table below summarises the composition of regulatory capital:
2013 2012 KHR’000 Us$ KHR’000 Us$ tier 1 Capital Share capital 11,379,120 2,799,292 11,379,120 2,848,340 Share premium 5,535,835 1,361,829 5,535,835 1,385,691 Retained earnings 141,925,629 23,895,397 105,866,760 26,499,815 Statutory reserve 2,285,868 562,329 2,285,868 572,182 Currency risk reserve 2,686,781 537,407 2,383,890 596,718 Legal reserve 1,137,912 279,929 1,137,912 284,834 Capital strengthening reserve 5,966,979 806,093 4,621,873 1,156,914 Less: Loan to related parties (644,764) (161,393) - - 170,273,360 30,080,883 133,211,258 33,344,494 tier 2 Capital Subordinated debts (*) 4,032,971 1,009,505 4,032,971 1,009,505
Total regulatory capital 174,306,331 31,090,388 137,244,229 34,353,999 (*) This represents subordinated debts approved by the Central Bank.
Annual Report 2013 93 Microfinance Institution “Amret” Activities of Amret’s clients making souvenir handicrafts (Siem Reap city, Siem Reap province) Activities of Amret’s client, an artist, painting a picture (Siem Reap city, Siem Reap province) APPENDIX: NOTES ON COMPLIANCE WITH THE CENTRAL BANK’S PRAKAS
Appendix: Notes On Compliance With The Central Bank’s Prakas 97
Schedule 1 Net Worth And Solvency Ratio 99
Schedule 2 Liquidity Ratio 101
Schedule 3 Net Open Position In Foreign Currency 102
Schedule 4 Reserve Requirment 103
Schedule 5 Loan Classification, Provisioning, And Delinquency Ratio 104
96 Appendix: Notes On Compliance With The Central Bank’s Prakas For The Year Ended 31 December 2013
1. SOLVENCY RATIO, Prakas No. B7-07-163 A licensed deposit-taking microfinance institution shall at all times maintain a solvency ratio of more than 15%. As at 31 December 2013, the solvency ratio of the Company was 19.99%. The net worth and solvency ratio calculation are detailed in Schedule 1. 2. LIQUIDITY RATIO, Prakas No. B7-07-163 A licensed deposit-taking microfinance institution shall at all times maintain a liquidity ratio of at least 50%. As at 31 December 2013, the liquidity ratio of the Company was 169%. The liquidity ratio calculation is detailed in Schedule 2. 3. NET OPEN POSITION IN FOREIGN CURRENCY, Prakas No. B7-07-134 A licensed microfinance institution shall at all times maintain a net open position in foreign currencies in either any foreign currency or an overall net open position in all foreign currencies, whether long or short, which shall not exceed 20% of the Company’s net worth. As at 31 December 2013, the net open position in Khmer Riel, US$ and THB do not exceed 20% of the Company’s net worth. The net open position calculation is detailed in Schedule 3. 4. RESERVE REQUIREMENT, Prakas No. B7-07-163 A licensed deposit-taking microfinance institution shall deposit 8% of its deposits into an account maintained with the Central Bank. On 22 January 2009, the Company received a licence from the Central Bank to conduct a deposit-taking business. As at 31 December 2013, the Company’s reserve requirement was KHR 29,519,780 thousand which is lower by KHR 639,378 thousand than the Central Bank’s requirement as per detail calculation in Schedule 4. However, on 14 January 2014, the Company made additional reserve requirement of KHR 791,010 thousand with the Central Bank to comply with the requirement. According to article 3 of the aforementioned Prakas, the Company is allowed to replenish its reserve requirement shortfall within 14 days after each of month end. The reserve requirement calculation is detailed in Schedule 4. 5. LOAN CLASSIFICATION, PROVISIONING, AND DELINQUENCY RATIO, Prakas No. B7-02-186 Licensed microfinance institutions shall classify their loan portfolios into the following four classes, depending on thefinancial situation of the borrower and the timeliness of principal and interest payments. Loan term of one year or less than one year • Standard: good financial condition and punctual payment of principal and interest • Sub-standard: some payments of principal and/or interest are overdue by 30 days or more • Doubtful: some payments of principal and/or interest are overdue by 60 days or more • Loss: some payments of principal and/or interest are overdue by 90 days or more
Annual Report 2013 97 Microfinance Institution “Amret” Appendix: Notes On Compliance With The Central Bank’s Prakas For The Year Ended 31 December 2013
Loan term of more than one year • Standard: good financial condition and punctual payment of principal and interest • Sub-standard: some payments of principal and/or interest are overdue by 30 days or more • Doubtful: some payments of principal and/or interest are overdue by 180 days or more • Loss: some payments of principal and/or interest are overdue by 360 days or more Mandatory levels for specific provisions on the loans are classified as follows: • Sub-standard: 10% regardless of the collateral value except cash • Doubtful: 30% regardless of the collateral value except cash • Loss: 100% As at 31 December 2013, the specific provision provided by the Company was KHR 155,674 thousand which is in compliance with the Central Bank’s Prakas. Loan classification, provision and delinquency ratio calculation are detailed inSchedule 5.
Activities of Amret’s clients harvesting cassava (Krakor district, Pursat province)
Annual Report 2013 Microfinance Institution “Amret” 98 Schedule 1 Net Worth And Solvency Ratio As At 31 December 2013
KHR ‘000 i- sub-total A: items to be added - Capital or endowment 11,379,120 - Reserve, other than revaluation reserves 12,077,540 - Premium related to capital (share premium) 5,535,835 - Provision for general banking risks, with the prior agreement of the Central Bank - Retained earnings 99,850,557 - Audited net profit for the latest financial year 42,075,072 - Other items approved by the Central Bank - 170,918,124 II- Sub-total B: Items to be deducted - For shareholders, directors, managers and their next of kin > Unpaid portion of capital - > Advances, loans, security and the agreement of the persons concerned as defined above 644,764 - Holding of own shares at their book value - - Accumulated losses - - Formation expenses - - Losses determined on dates other than the end of the annual accounting period (including provisions to be made for doubtful debt and securities) - - iii- total C: BAsE NEt WoRtH = A – B 170,273,360 iv- sub-total D: items to be added - Revaluation reserves, with the prior agreement of the Central Bank - - Subordinated debt, with the prior agreement of the Central Bank, up to 100% of base net worth 4,032,971 - Other items, with the prior agreement of the Central Bank, could be included in the calculation of net worth and shall not be more than the base net worth - 4,032,971 V- Sub-total E: Items to be deducted - Equity participation in banking and financial institutions - - Other items - - vi- total F: totAL NEt WoRtH = C + D – E 174,306,331
Annual Report 2013 99 Microfinance Institution “Amret” Schedule 1 Net Worth And Solvency Ratio As At 31 December 2013
KHR ‘000 i- Numerator (A)
Net worth 174,306,331 ii- Denominator (B)
Assets (*) KHR ‘000 Weighting
- Cash 50,423,033 0% - - Gold - 0% - - Claims on the Central Bank 79,494,596 0% - - Assets collateralised by deposits - 0% - - Claims on sovereigns rated AAA to AA- - 0% - - Claims on sovereigns rated A+ to A- - 20% - - Claims on banks rated AAA to AA- - 20% - - Claims on sovereigns rated BBB to BBB- - 50% - - Claims on banks rated A+ to A- - 50% - - All other assets 872,046,170 100% 872,046,170 1,001,963,799 872,046,170
III- Solvency ratio (A/B) 19.99%
(*): The denominator of the ratio shall comprise the aggregate of the assets (net amount after deduction of provision and depreciation) and off-balance sheet items, weighted to their degree of risk. It excludes the items which are deducted in calculating the net worth according to the provisions of the Prakas on the calculation of microfinance institutions’ net worth.
Annual Report 2013 Microfinance Institution “Amret” 100 Schedule 2 Liquidity Ratio As At 31 December 2013
KHR ‘000
1- Numerator: Liquid assets
- Cash on hand 50,423,033 - Balances with the Central Bank 48,836,904 - Balances with banks 24,440,532
sub-total (A) 123,700,469
Less: - Amount owed to the Central Bank - - Amount owed to banks 3,995,000
sub-total (B) 3,995,000
Net liquidity (A – B) 119,705,469
Plus: - Portion of loans outstanding maturing in less than one month 39,539,746
Liquid assets (L) 159,245,215
2- Denominator: Adjusted amount of deposits (A) Category of deposits KHR ‘000 %
- Voluntary savings 376,989,473 25% 94,247,368
LIQUIDITY RATIO (L/A) 169%
Annual Report 2013 101 Microfinance Institution “Amret” Schedule 3 Net Open Position In Foreign Currency As At 31 December 2013
Liabilities Net open NOP/ Currency Assets and capital position (NoP) Net worth Limit KHR ‘000 KHR ‘000 KHR ‘000 % %
US$ 636,882,881 621,738,320 15,144,561 8.69% 20% THB 4,381,443 4,218,450 162,993 0.09% 20% KHR 360,699,475 376,007,029 (15,307,554) -8.78% 20% total 1,001,963,799 1,001,963,799 - -
Net worth 174,306,333
Activities of Amret’s clients selling dried fish (Stoung district, Kampong Thom province)
Annual Report 2013 Microfinance Institution “Amret” 102 Schedule 4 Reserve Requirment As At 31 December 2013
KHR ‘000
1- voluntary 1-1 Demand - 1-2 Savings (4%-5% per annum) 71,777,645 1-3 Term 305,211,828 1-4 Other -
1-5 Total reservable deposits 376,989,473
2- Compulsory 2-1 Program (3% per annum) - 2-2 Program - 2-3 Program -
2-4 Total compulsory savings -
3- Total savings mobilised 376,989,473
8% Reservable deposits 30,159,158
Annual Report 2013 103 Microfinance Institution “Amret” Schedule 5 Loan Classification, Provisioning, And Delinquency Ratio As At 31 December 2013
Specific Amount Rate Provision Loan classification KHR ‘000 % KHR ‘000
1-Loans of one year or less 1-1 Standard 149,351,837 - 1-2 Substandard past due ≥ 30 days 7,036 10% 704 1-3 Doubtful past due ≥ 60 days 9,289 30% 2,787 1-4 Loss past due ≥ 90 days 33,464 100% 33,464 sub-total 1 149,401,626 36,955
2-Loans of more than one year 2-1 Standard 664,161,387 - 2-2 Substandard past due ≥ 30 days 281,967 10% 28,197 2-3 Doubtful past due ≥ 180 days 251,528 30% 75,458 2-4 Loss past due ≥ 360 days 15,065 100% 15,065 sub-total 2 664,709,947 118,720
Grand total 1+2 814,111,573 115,675
All loans past due > 30 days (A) 598,349
Loans outstanding (B) 814,111,573
Delinquency ratio (A/B) 0.07%
Annual Report 2013 Microfinance Institution “Amret” 104 Contact Details
Head Office 2.3 Praek Tamak Branch #35BA, Street 169, Sangkat Veal Vong, Khan 7 Makara, Phnom Penh, Praek Tamak Village, Praek Tamak Commune, Khsach Kandal District, P.O.Box 411, Postal Code: 12253, Tel: 023 999 033 / 023 885 942 Kandal Province. E-mail: [email protected] Tel: 077 959 673 / 012 924 251 E-mail: [email protected] 1. Phnom Penh Office # 35BA, Street Tchecoslovaquie (169), Sangkat Veal Vong, Khan 7 Makara, 2.4 Lavea Em Branch Phnom Penh, Cambodia. Toek Klang Village, Toek Klang Communce, Lavea Em District, Kandal Province. Tel: 012 894 768 Tel: 012 914 369 E-mail: [email protected] E-mail: [email protected] 1.1 Bak Touk Branch 2.5 Khsach Kandal Branch # 35BA, Street Tchecoslovaquie (169), Sangkat Veal Vong, Khan 7 Makara, Prek Takov Village, Prek Takov Commune, Khsach Kandal District, Kandal Province. Phnom Penh, Cambodia. Tel: 012 924 265 / 077 959 667 Tel: 077 829 693 / 023 992 932 E-mail: [email protected] E-mail: [email protected] 2.6 Kien Svay Branch 1.2 Steung Meanchey Branch Toul Tnoat Village, Korki Commune, Kien Svay District, Kandal Province. # 511, Monireth Blvd, Trea 3 Village, Steung Meanchey Commune, Tel: 012 209 939 / 012 557 963 Meanchey District, Phnom Penh. E-mail: [email protected] Tel: 012 201 796 / 077 355 328 2.7 Prek Por Branch E-mail: [email protected] Rokathvea Village, Prek Por Commune, Srey Santhor District, 1.3 Toul Kork Branch Kampong Cham Province. # 150BD, St. 516, Sangkat Beung Kak1, Khan Toul Kork, Phnom Penh City. Tel: 012 683 154 / 012 683 144 Tel: 012 924 866 / 012 924 778 E-mail: [email protected] E-mail: [email protected] 2.8 Koh Thom Branch 1.4 Chbar Ampov Branch Svay Kroam Village, Praek Thmey Commune, Koh Thom District, Kandal Province. #593, Deumsleng Village, Sangkat Chbar Ampov 2, Khan Meanchey, Tel: 077 959 669 / 012 924 154 Phnom Penh City. E-mail: [email protected] Tel: 012 217 455 / 012 217 465 2.9 Kandal Stoeng Branch E-mail: [email protected] Svay Ming Village, Bakou Commune, Kandal Stoeng District, Kadal Province. 1.5 Chaom Chao Branch Tel: 077 959 674 / 012 557 954 #235, Preypring Khangcheung Village, Sangkat Chaom Choa, E-mail: [email protected] Khan Porsenchey, Phnom Penh City. 3. Kampong Cham Provincial Office Tel: 012 701 448 / 012 701 445 # 99, Street Tuol Sbouv, Village 2, Sangkat Veal Vong, Krong Kampong Cham, E-mail: [email protected] Kampong Cham Province. 1.6 Psar Deumthkov Branch Tel: 012 634 048 #600B, St. 271, 06 Village, Sangkat Psar Deumthkov, Khan Chamkarmorn, E-mail: [email protected] Phnom Penh City. 3.1 Kampong Siem Branch Tel: 012 459 304 / 012 459 303 # 99, Street Toul Sbov, Village 2, Sangkat Veal Vong, Kampong Cham Krong, E-mail: [email protected] Kampong Cham Province. 1.7 Russey Keo Branch Tel: 077 959 677 / 012 924 651 #930, NR 05, Mittapheap Village, Sangkat Russey Keo, Khan Russey Keo, E-mail: [email protected] Phnom Penh City. 3.2 Prey Chhor Branch Tel: 012 457 884 / 012 457 885 #078, Prey Totueng Village, Chrey Vien Commune, Prey Chhor Distict, E-mail: [email protected] Kampong Cham Province. 1.8 Psar Deyhuy Branch Tel: 077 959 678 / 012 404 687 #1244, St. 1019, Teuk Thlar Village, Sangkat Teuk Thlar, Khan Sen Sok, Phnom Penh City. E-mail: [email protected] Tel: 012 450 212 / 012 450 192 3.3 Kang Meas Branch E-mail: [email protected] Thlok Chroeu Village , Khchao Commune , Kang Meas District , 2. Kandal Provincial Office Kampong Cham Province. # 554-555, Street 21, Sangkat Takhmao, Krong Takhmao, Kandal Province. Tel: 077 959 676 / 012 924 501 Tel: 012 924 123 E-mail: [email protected] E-mail: [email protected] 3.4 Chamkar Leu Branch 2.1 Takhmao Branch NR 71, Thnalbek Keut Village, Svay Teab Commune, Chamkar Leu District, # 554-555, Street 21, Sangkat Takhmao, Krong Takhmao, Kandal Province. Kampong Cham Province. Tel: 012 932 074 / 012 926 709 Tel: 077 993 075 / 077 990 944 E-mail: [email protected] E-mail: [email protected] 2.2 S’ang Branch 3.5 Batheay Branch Prek Run Village, Prek Koy Communce, S’ang District, Kandal Province. Phaav Village, Phaav Commune, Batheay District, Kampong Cham Province. Tel: 077 959 672 / 012 404 683 Tel: 012 931 906 / 012 210 917 E-mail: [email protected] E-mail: [email protected]
Annual Report 2013 105 Microfinance Institution “Amret” Contact Details
3.6 Skun Branch 5.1 Preah Sdach Branch Skun Village, Sotep Commune, Choeng Prey District, Kampong Cham Province. Krasang Torng Village, Angkor Reach Commune, Preah Sdach District , Tel: 012 205 156 / 077 379 259 Prey Veng Province. E-mail: [email protected] Tel: 012 924 097 / 077 870 562 E-mail: [email protected] 4. Kampot, Kep, Sihanouk Ville, and Koh Kong Provincial Office Phoum 1Ousphea, Sangkat Kampong Kandal, Krong Kampot, Kampot Province. 5.2 Ba Phnum Branch Tel: 012 634 044 Chheu Kach Village, Chheu Kach Communce, Ba Phnum District, E-mail: [email protected] Prey Veng Province. Tel: 077 95 96 93 / 012 446 305 4.1 Kampot Branch E-mail: [email protected] 1Usophea Village, Sangkat Kampong Kandal, Krong Kampot, Kampot Province. Tel: 077 959 684 / 012 609 114 5.3 Kanhchriech Branch E-mail: [email protected] Prongeuy Muoy Village, Thma Pun Commune, Kanhchriech District , Prey Veng Province. 4.2 Kampong Trach Branch Tel: 077 959 694 / 012 433 219 Kampong Trach 1 Village, Kampong Trach Khang Koeut Commune, E-mail: [email protected] Kampong Trach District, Kampot Province. Tel: 077 959 685 / 012 446 301 5.4 Peam Chor Branch E-mail: [email protected] Prekdach Village, Prekdach Communce, Leuk Daek District, Kandal Province. Tel: 012 448 691 / 077 959 701 4.3 Banteay Meas Branch E-mail: [email protected] Preykrola Khang Lech Village, Toukmeas Khang Lech Commune, Banteay Meas District, Kampot Procince. 5.5 Prey Veng Branch Tel: 077 959 682 / 012 446 275 Phum 2, Sangkat Kampong Leav , Krong Prey Veng, Prey Veng Province. E-mail: [email protected] Tel: 077 959 698 / 012 614 402 E-mail: [email protected] 4.4 Prey Nup Branch Boeng Veng Village, Veal Rinh Commune, Prey Nop District, Sihanouk Province. 5.6 Svay Antor Branch Tel: 077 959 686 / 012 433 196 #685, Pou Chentam Village, Svay Antor Commune, Svay Antor District, E-mail: [email protected] Prey Veng Province. Tel: 012 893 380 / 089 669 694 4.5 Angkor Chey Branch E-mail: [email protected] Po Village, Phnom Kong Commune , Angkor Chey District , Kampot Province. Tel: 077 959 681 / 012 433 126 5.7 Sithor Kandal Branch E-mail: [email protected] Preaek Sandaek Village, Preaek Changkran Commune, Sithor Kandal District, Prey Veng Province. 4.6 Chhouk Branch Tel: 012 894 755 / 012 701 383 Chrey Village , Satv Pong Commune , Chhouk District , Kampot Province. E-mail: [email protected] Tel: 077 959 683 / 012 404 681 E-mail: [email protected] 5.8 Pea Reang Branch Kampong Popil Village, Kampong Popil Commune, Pea Reang District, 4.7 Preah Sihanouk Branch Prey Veng Province. Road Ekareach, Phoum 2, Sangkat 2, Krong Preah Sihanouk, Tel: 077 959 671 / 012 924 209 Preah Sihanouk Province. E-mail: [email protected] Tel: 012 914 389 / 012 914 388 E-mail: [email protected] 5.9 Tean Pleung Branch Tean Pleung Village, Smoung Commune, Kamchay Mear District, 4.8 Sre Ambel Branch Prey Veng Province. Trapaing Village, Srae Ambel Commune, Srae Ambel District, Tel: 012 701 440 / 012 432 986 Koh Kong Province. E-mail: [email protected] Tel: 012 217 393 / 012 205 717 E-mail: [email protected] 5.10 Neak Leung Branch 01 Village, Prek Khsay Khor Commune, Peam Ro District, Prey Veng Province. 4.9 Chumkiri Branch Tel: 077 358 992 / 012 661 181 Trapeang Veng Village, Trapeang Reang Commune, Chumkiri District, E-mail: [email protected] Kampot Province. Tel: 012 214 915 / 012 25 80 28 6. Svay Rieng Provincial Office E-mail: [email protected] Sounthmey Village, Sangkat PreyChhlak, Krong Svay Rieng, Svay Rieng Province. 4.10 Koh Kong Branch Tel: 012 201 797 Phum 02, Sangkat Smach Meanchey, Krong Khemarak Phumin, E-mail: [email protected] Koh Kong Province. 6.1 Svay Rieng Branch Tel: 012 260 074 / 012 264 403 Sounthmey Village, Sangkat PreyChhlak, Krong Svay Rieng, Svay Rieng Province. E-mail: [email protected] Tel: 077 738 343 / 077 45 91 74 E-mail: [email protected] 5. Prey Veng Provincial Office Phum 2, Sangkat Kampong Leav , Krong Prey Veng, Prey Veng Province. 6.2 Kampong Trabek Branch Tel: 012 634 046 Prasat Village, Prasat Commune, Kampong Trabek District, Prey Veng Province. E-mail: [email protected] Tel: 077 959 699 / 012 433 194 E-mail: [email protected]
Annual Report 2013 Microfinance Institution “Amret” 106 Contact Details (Cont.)
6.3 Mesang Branch 8.1 Doun Keo Branch Veang Village , Chi Phoch Commune , Mesang District , Prey Veng Province. Lory Village, Sangkat Roka Knong, Krong Doun Keo, Takeo Province. Tel: 077 959 700 / 012 425 380 Tel: 077 959 662 / 012 924 484 E-mail: [email protected] E-mail: [email protected] 6.4 Svay Chrum Branch 8.2 Prey Kabbas Branch Svay Kngor Village, Svay Chrum Communce, Svay Chrum District, Lvea Thnoth Village, Prey Lvea commune, Prey Kabbas District, Takeo Province. Svay Rieng Province. Tel: 077 959 664 / 012 427 612 Tel: 012 923 758 / 077 959 703 E-mail: [email protected] E-mail: [email protected] 8.3 Kirivong Branch 6.5 Chiphu Branch Kampong Village, Preah Bat Choan Chum Commune, Kirivong Distict, Tuol Ampil Village, Sangkat Chrak Mtes, Krong Bavet, Svay Rieng Province. Takeo Province. Tel: 012 650 318 / 012 650 316 Tel: 077 959 663 / 012 924 481 E-mail: [email protected] E-mail: [email protected] 6.6 Romeas Haek Branch 8.4 Tram Kak Branch Kampong Trach, Kampong Trach Commune, Romeas Haek District, Angk Tasaom Village, Angk Tasaom Commune, Tram Kak District, Takeo Province. Svay Rieng Province. Tel: 077 959 665 / 012 609 159 Tel: 012 650 294 / 012 928 574 E-mail: [email protected] E-mail: [email protected] 8.5 Bati Branch 7. Kampong Speu Provincial Office Chork Village, Trapeang Sab Commune, Bati District, Takeo Province. St. 4, Peanichekam Village, Sangkat Roka Thom, Krong Chbarmon, Tel: 077 959 661 / 012 425 362 Kampong Speu Province. E-mail: [email protected] Tel: 012 634 049 8.6 Kampong Chrey Branch E-mail: [email protected] Kampong Chrey Village, Smoung Commune, Traing District, Takeo Province. 7.1 Samrong Tong Branch Tel: 012 914 375 / 012 914 377 St. 4, Peanichekam Village, Sangkat Roka Thom, Krong Chbarmon, E-mail: [email protected] Kampong Speu Province. 8.7 Samrong Branch Tel: 077 959 692 / 012 605 130 Prey Torteng Village, Samrong Communce, Samrong District, Takeo Province. E-mail: [email protected] Tel: 077 358 994 / 012 20 26 90 7.2 Kong Pisei Branch E-mail: [email protected] Tramkhnar Village, Snam Krapeu Commune, Kong Pisei District, 8.8 Angkor Borei Branch Kampong Speu Province. Samaky Village, Angkor Borei Commune, Angkor Borei District, Takeo Province. Tel: 077 959 689 / 012 446 207 Tel: 012 20 52 79 / 012 25 80 14 E-mail: [email protected] E-mail: [email protected]
7.3 Odoung Branch 9. Siem Reap Provincial Office Odoung Village, Veang Chas Commune, Odoung District, Banteay Chas Village, Slakram Commune, Siem Reap District, Siem Reap Province. Kampong Spue Province. Tel: 012 614 420 Tel: 077 959 691 / 012 446 205 E-mail: [email protected] E-mail: [email protected] 9.1 Siem Reap Branch 7.4 Barsedth Branch Banteay Chas Village, Slakram Commune, Siem Reap District, Siem Reap Province. Phsarslablaeng Village, Svay Rumpea Commune, Barsedth District, Tel: 077 959 651 / 012 924 861 Kompong Speu Province. E-mail: [email protected] Tel: 012 229 457 / 012 683 269 E-mail: [email protected] 9.2 Kralanh Branch Pe Chou Village, Kralanh Commune, Kralanh District, Siem Reap Province. 7.5 Bat Doeng Branch Tel: 012 217 533 / 012 217 532 Bat Doeng Village, Ksem Ksan Commune, Odong District, E-mail: [email protected] Kampong Speu Province. Tel: 077 959 670 / 012 924 230 9.3 Soutr Nikom Branch E-mail: [email protected] # 10, Group 1,N.R 6 A, Dam Daek Thmei Village, Dam Daek Commune , Soutr Nikom District , Siem Reap Province. 7.6 Angk Snuol Branch Tel: 077 959 652 / 012 932 980 #143, St. NR4, Thnal Tateung Village, Damnak Ampil Commune, E-mail: [email protected] Angk Snuol District, Kandal Province. Tel: 012 930 755 / 012 683 194 9.4 Chi Kraeng Branch E-mail: [email protected] Kampong Kdey I Village, Kampong Kdey Commune, Chi Kraeng District, Siem Reap Province. 8. Takeo Provincial Office Tel: 077 959 650 / 012 924 809 Lory Village, Sangkat Roka Knong, Krong Doun Keo, Takeo Province. E-mail: [email protected] Tel: 012 634 047 9.5 Samrong Branch E-mail: [email protected] Samrong Village, Sangkat Samrong, Krong Samrong, Oddar Meanchey Province. Tel: 012 26 80 73 / 092 226 492 E-mail: [email protected]
Annual Report 2013 107 Microfinance Institution “Amret” Contact Details (Cont.)
10. Battambang Provincial Office 12.4 Chhlong Branch #883, Road 5, Group 42, Preak Mohatep Village, Sangkat Svaypor, Koh Kandol Village, Chhlong Commune, Chhlong District, Kratie Province. Battambang City, Battambang Province. Tel: 012 851 398 / 012 851 396 Tel: 077 355 369 E-mail: [email protected] E-mail: [email protected] 12.5 Memot Branch 10.1 Battambang Branch Tboung Wat Village, Memot Commune, Memot District, Kampong Cham Province. #883, Road 5, Group 42, Preak Mohatep Village, Sangkat Svaypor, Tel: 012 763 001 / 012 432 970 Battambang City, Battambang Province. E-mail: [email protected] Tel: 077 355 370 / 077 355 373 12.6 Kracheh Branch E-mail: [email protected] Wat Village, Sangkat Kracheh, Krong Kracheh, Kratie Province. 10.2 Maung Russey Branch Tel: 012 268 103 / 012 268 104 Group 05, Maung Village, Maung Commune, Maung Russey District, E-mail: [email protected] Battambang Province. Tel: 077 355 338 / 077 355 339 13. Kampong Chhnang Provincial Office E-mail: [email protected] #A53, Kandal Village, Sangkat Kampong Chhnang, Krong Kampong Chhnang, Kampong Chhnang Province. 10.3 Bavel Branch Tel: 012 205 747 Bavel 1 Village, Bavel Commune, Bavel District, Battambang Province. E-mail: [email protected] Tel: 012 635 780 / 012 635 776 E-mail: [email protected] 13.1 Kampong Chhnang Branch #A53, Kandal Village, Sangkat Kampong Chhnang, 10.4 Pailin Branch Krong Kampong Chhnang, Kampong Chhnang Province. Outapuk Leu Village, Sangkat Pailin, Krong Pailin, Pailin Province. Tel: 077 959 688 / 012 924 296 Tel: 012 259 737 / 012 259 737 E-mail: [email protected] E-mail: [email protected] 13.2 Kampong Trolach Branch 11. Banteay Meanchey Province Soben Village, Peany Commune, Kampong Trolach District, 1 Village, Sangkat Preah Punlea , krong Sereisophorn, Kampong Chhnang Province. Banteay Meanchey Province. Tel: 077 959 690 / 012 446 273 Tel: 012 83 57 50 E-mail: [email protected] E-mail: [email protected] 13.3 Pursat Branch 11.1 Mongkol Borey Branch Peal Nhek 1 Village, Sangkat Phteah Prey, Krong Pursat, Pursat Province. Ruessei Kraok Village, Ruessei Kraok Commune, Mongkol Borey District, Tel: 012 220 441 / 012 634 082 Banteay Meanchey Province. E-mail: [email protected] Tel: 012 835 780 / 012 851 744 E-mail: [email protected] 14. Kampong Thom Provincial Office #41, St. NR 6, Domrey Cheon Kla Village, Sangkat Domrey Cheon Kla, 11.2 Poipet Branch Krong Stung Sen, Kampong Thom Province. Palilay Village, Sangkat Poipet, Krong Poipet, Banteay Meanchey Province. Tel: 012 238 176 Tel: 012 904 368 / 012 904 498 E-mail: [email protected] E-mail: [email protected] 14.1 Stung Sen Branch 11.3 Sereisophorn Branch #41, St. NR 6, Domrey Cheon Kla Village, Sangkat Domrey Cheon Kla, 1 Village, Sangkat Preah Punlea , krong Sereisophorn, Krong Stung Sen, Kampong Thom Province. Banteay Meanchey Province. Tel: 012 201 238 / 012 201 343 Tel: 012 904 855 / 012 904 691 E-mail: [email protected] E-mail: [email protected] 14.2 Stoung Branch 12. Krong Suong Provincial Office Chheuteal Village, Kampongchen Tboung Commune, Stoung District, Cheung Lang Village, Sangkat Suong, Krong Suong, Kampong Cham Province. Kampong Tom Province. Tel: 077 891 979 Tel: 077 959 653 / 012 924 689 E-mail: [email protected] E-mail: [email protected] 12.1 Suong Branch 14.3 Baray Branch Cheung Lang Village, Sangkat Suong, Krong Suong, Kampong Cham Province. Rumchek Village, Triel Commune, Baray District, Kampong Thom Province. Tel: 077 959 680 / 012 924 658 Tel: 077 959 675 / 012 409 612 E-mail: [email protected] E-mail: [email protected] 12.2 Ponhea Kraek Branch 14.4 Preah Vihear Branch Kandaol Kaong Village, Koang Kang Commune, Ponhea Kraek District, Group #14, Kandal Village, Sangkat Kampong Branak, Krong Preah Vihear, Kampong Cham Province. Preah Vihear Province. Tel: 077 959 679 / 012 924 523 Tel: 012 432 940 / 012 432 935 E-mail: [email protected] E-mail: [email protected] 12.3 Kroch Chhma Branch Kroch Chhma Krom Village, Kroch Chhma Commune, Kroch Chhma District, Kampong Cham Province. Tel: 077 730 086 / 012 206 395 E-mail: [email protected] Annual Report 2013 Microfinance Institution “Amret” 108 Microfinance Institution “Amret” Annual Report
Annual Report 2013 2013