ANNUAL REPORT 2013

CONTENTS HIGHLIGHT ON KEY ACHIEVEMENTS ...... 1

MESSAGE FROM CHAIRPERSON ...... 3

MESSAGE FROM CHIEF EXECUTIVE OFFICER ...... 4

CHAMROEUN AT A GLANCE ...... 5

VISION, MISSION, AND CORE VALUES ...... 8

OPERATIONAL PERFORMANCE ...... 9

OPERATIONAL COVERAGE ...... 9 SCALING UP OUTREACH TO MORE POOR HOUSEHOLDS ...... 10 NEW FINANCING INITIATIVES TO HELP THE POOR ADDRESS THEIR VULNERABILITIES ...... 11 NEW MICROINSURANCE SCHEME FOR BETTER HEALTH TREATMENT ...... 13

SOCIAL PERFORMANCE ...... 14

SOCIO-ECONOMIC SERVICES FOR MORE MEANINGFUL IMPACTS ...... 14 SOCIAL PERFORMANCE MONITORING ...... 16 EXTENDING CHAMROEUN’S ACTIVITIES BEYOND SOCIAL MICROFINANCE ...... 17

REVISED STRATEGIC PLAN FOR 2013-2017 ...... 18

GOVERNANCE ...... 19

SHAREHOLDERS AND SHAREHOLDING STRUCTURE ...... 19 BOARD OF DIRECTORS ...... 21 KEY ACTIVITIES OF OUR SPECIALIZED COMMITTEES ...... 22 EXECUTIVE TEAM ...... 23 EXPANDING STRUCTURE FOR BETTER SERVICE QUALITY AND INNOVATIONS ...... 24

STAFF DEVELOPMENT ...... 26

BUILDING UP OUR HUMAN CAPITAL: A KEY PRIORITY ...... 26 MOTIVATION, INSPIRATION, AND EMPOWERMENT THROUGH REWARDS AND - SUCCESSION PLANNING ...... 27

RECOGNITION AND AWARDS ...... 28

AUDITED FINANCIAL STATEMENTS ...... 29

REPORT OF BOARD OF DIRECTORS ...... 29 REPORT OF THE INDEPENDENT AUDITORS ...... 33 BALANCE SHEET ...... 35 INCOME STATEMENT ...... 36 STATEMENT OF CASH FLOW ...... 37 STATEMENT OF CHANGES IN EQUITY ...... 38

RATIONALE BEHIND OUR CHOSEN CORPORATE “PINK” COLOR AND LOGO ...... 39

NETWORKS AND PARTNERSHIPS ...... 41

OFFICE ADDRESSES ...... 42 HIGHLIGHT ON KEY ACHIEVEMENTS

OPERATIONAL PERFORMANCE 2011 2012 2013

Operating Provinces 9 13 14

Operating Districts 51 72 83

Operating Communes 341 505 577

Operating Villages 1,936 2,969 3,620

Main Branches 12 14 15

District Branches 3 7 24

7EXIPPMXI3J½GIW 914 -

Active Borrowers 27,900 41,480 52,419

Gross Loan Portfolio (KHR’Million) 12,980 20,269 25,199

Average Loan Disbursed (KHR) 667,300 727,300 784,100

Staff 163 213 333

0SER3J½GIVW 84 102 164

&SVVS[IVWTIV0SER3J½GIV 332 407 320

Portfolio at Risk (30 Days) 0.05% 0.05% 0.33%

Write-off Ratio 0.06% 0.02% 0.05%

ANNUAL REPORT 2013 1 SOCIAL PERFORMANCE 2011 2012 2013

Female Borrower Ratio 81.2% 85.4% 83.5%

Average Loan Portfolio as % GNI per Capita 12.6% 12.6% 12.4%

Partner Loyalty Rate 75.2% 70.8% 72.3%

% Female Staff 19.0% 26.3% 22.4%

% Female Management 22.2% 18.2% 23.3%

% Staff with Disability 0.6% 1.9% 1.7%

Staff Turnover Ratio 9.9% 10.8% 16.5%

Participants to Financial Literacy and Business Training 44,663 44,148 11,080

Participants to Training on Social Topics. 49,701 37,933 1,952

FINANCIAL PERFORMANCE 2011 2012 2013

Total Asset (KHR’Million) 17,627 24,874 31,041

Total Equity (KHR’Million) 2,914 5,535 7,034

2IX4VS½XEJXIV8E\IW (KHR’000) 465,826 149,790 373,486

Porfolio Yield 49.8% 43.5% 47.1%

3TIVEXMSREP7IPJWYJ½GMIRG]2 108.1% 103.5% 104.2%

Return on Assets2 2.4% 0.4% 1.6%

Return on Equity2 11.6% 2.2% 6.8%

2)\GPYHMRKKVERXW*<GSRZIVWMSRERHRSRSTIVEXMRKI\TIRWIW

2 ANNUAL REPORT 2013 MESSAGE MS. HÉLÈNE KERAUDREN FROM CHAIRPERSON

Chamroeun continued to serve strong social objectives in All these developments and achievements will be further 2013 by combining growth in outreach with new products consolidated in 2014 as Chamroeun remains committed and services to better address its Ipartners’ needs. By XSTVSZMHMRKMRRSZEXMZIWSGMEPQMGVS½RERGIWIVZMGIWXSMXW I\TERHMRK MXW RIX[SVO GPSWIV XS XLI GSQQYRMXMIW MX partners to help them succeed in their ventures. serves, the institution now reaches out to more than 52,000 active borrowers in 14 provinces of . -[SYPHPMOIXSI\XIRHQ]XLEROWXSXLIXIEQJSVXLIMV The focus remains, as always, on poorer households, with I\IQTPEV]GSQQMXQIRXERHXSEPPWXEOILSPHIVWJSVXLIMV a range of affordable and adapted products and services. active support; I trust that the strong social values shared at all levels of the organisation will continue to make New developments in 2013 have allowed Chamroeun to 'LEQVSIYREOI]WSGMEPQMGVS½RERGITPE]IVMR'EQFSHME bring innovative and ever more complete services to its partners: access to a microinsurance provider to cover YRI\TIGXIH LIEPXL I\TIRWIW ERH VIHYGI ZYPRIVEFMPMX]  ½RERGMRKERHEHZMGIJSVGPIERIRIVK]WSPYXMSRWXSEHHVIWW Yours sincerely daily lighting and cooking needs; access to USD loans to save on transaction and conversion costs.

Socio-economic services have also been further developed with a community based approach, bringing training to the doorsteps of our partners. More socio- IGSRSQMG SJ½GIVW ERH MRXIVEGXMZI XVEMRMRK QSHYPIW have boosted the outreach of these services, as well as HÉLÈNE KERAUDREN satisfaction from partners who enjoy these workshops. Board Chairperson  'LEQVSIYR1MGVS½RERGI0MQMXIH The success and very identity of Chamroeun lie in its strong social mission and the will to make a difference MR XLI [SVPH SJ QMGVS½RERGI8LI WSGMEP TIVJSVQERGI diagnosis conducted with Entrepreneurs du Monde, as [IPPEWXLIWSGMEPVEXMRKF]1MGVS½RER^ETVSZMHIEGPIEV picture on the achievements and remaining improvements for the institution. Moreover, in its will to always place TEVXRIVW ½VWX 'LEQVSIYR EPWS MRMXMEXIH E GIVXM½GEXMSR process on the Client Protection Principles.

1 Chamroeun calls its clients « partners » to underline its concern for the success of its clients in improving their livelihoods.

ANNUAL REPORT 2013 3 MESSAGE MR. SUON SOPHEA FROM CHIEF EXECUTIVE OFFICER

“2013 was a wonderful year for us. Even some major Furthermore, we are also proud of recent developments YRTVIHMGXIHIZIRXWWYGLEWWIVMSYW¾SSHPEFSVYRVIWXMR our complementary socio-economic services as a re- the garment sector, and political deadlock, we survived EHETXIHFYWMRIWWERH½RERGMEPPMXIVEG]XVEMRMRK[EWJYPP] E WMKRM½GERX KVS[XL ERH QEMRXEMRIH SYV TIVJSVQERGI rolled out across all service points with the support of 3TIVEXMSRW [IVI I\XIRWMZIP] I\TERHIH XS YVFER ERH  WTIGMEPM^IH WSGMSIGSRSQMG SJ½GIVW %X XLI IRH SJ semi-urban areas of some more provinces such as Pursat, 2013, more than 10,000 partners and non-partners Kampong Chhnang, and Prey Veng in addition to the [IRX XLVSYKL ZEVMSYW XVEMRMRK XSTMGW SJ FEWMG ½RERGMEP I\MWXMRK GSZIVEKI XS WIVZI QSVI TSSV TSTYPEXMSR 4IV and business management, and we strongly hope that the results, active borrowers and gross loan portfolio the application of these topics will contribute to an increased by 26% and 24% respectively whereas PAR 30 MQTVSZIQIRX SJ XLIMV ½RERGMEP ERH FYWMRIWW GSRHMXMSRW was still in a good condition at 0.33%. The service points VIWYPXIHMRFIXXIVPMZMRKGSRHMXMSRW&I]SRHQMGVS½RERGI also grew up to 40 with 333 committed staff serving and complementary socio-economic services, we started more than 52,000 poor households. We remained focus providing scholarship awards to 84 students from partner SRXLITSSVF]TVSZMHMRKXLIWQEPPIWXPSERWM^IGSQTEVIH LSYWILSPHWXLVSYKLSYV*SYRHEXMSRXSLIPTXLIMVRI\X to other MFIs in Cambodia-120 USD per partner. generations to have more access to education. With ½RERGMEPVIWYPXW[II\TIGXIHXLEX[I[MPPFIEFPI To meet the needs of our partners along with the to scale up this program in the upcoming years. efforts to help them reduce vulnerabilities, new products and services were developed, tested, and introduced. *MREPP]-[SYPHPMOIXSI\TVIWWQ]WMRGIVIXLEROWXSEPP With the support of its Foundation which was created stakeholders, board of directors, lenders, regulators, and late 2011, we were able to introduce a new health beloved staff for their contribution to help Chamroeun microinsurance scheme, under a partnership with GSRXMRYIERHI\TERHMXWWSGMEPFYWMRIWWEGXMZMXMIWXSLIPT PRÉVOIR (KAMPUCHEA) MICRO-LIFE INSURANCE the poor liberate themselves from poverty, and I hope PLC, PKMI. As of December 2013, 1,924 partners and you will strongly support us in the upcoming years. Your 455 of their household members were insured by this ½RERGMEPERHXIGLRMGEPWYTTSVXWEVIZIV]IWWIRXMEPJSVYW program. Also, USD loan were also made available to the to make positive and lasting changes to the poor. institution’s partners, who are transacting in USD, to help reduce transaction and coversion costs.

Financing clean energy solutions such as solar kits and Yours Sincerely, IJ½GMIRXGSSOWXSZIWMWEPWSMRXLIHIZIPSTQIRXTVSGIWW under a project called “Access to Clean Energy Program”, ERH [I I\TIGXIH XS WXEVX IEVP] 8LMWTVSNIGX [MPP IREFPI'LEQVSIYR´WTEVXRIVWXSLEZIEREGGIWWXSIJ½GMIRX ERH GPIER IRIVK] WSPYXMSRW ERH QMRMQM^I I\TIRWIW SR daily energy consumption, and it also contributes to the promotion of environmentally friendly products. SUON SOPHEA 'LMIJ)\IGYXMZI3J½GIV  'LEQVSIYR1MGVS½RERGI0MQMXIH

4 ANNUAL REPORT 2013 CHAMROEUN AT A GLANCE

Chamroeun was founded by Entrepreneurs du Monde, a French NGO, as a development program in early 2006 2005 with a focus on serving the poor within and surrounding areas through the provision of adapted Noting the large underserved poor communities in loans, savings, and microinsurance services. The very Phnom Penh, Entrepreneurs du Monde, a French NGO, ½VWXFVERGLIW[IVIIWXEFPMWLIHRIEVF]XLIQEMRQEVOIX signed an agreement with Phnom Penh Municipality places in the capital city to address the needs of the small and Cambodian Ministry of Foreign Affairs to start up a market stallholders, ambulant vendors, and other small WSGMEPQMGVS½RERGITVSNIGX8LITVSNIGX[EWIWXEFPMWLIH scale business activities. namely as “Chamroeun” (“prosperity” in Khmer) to aim EX TVSZMHMRK QMGVS½RERGI WIVZMGIW ERH GSQTPIQIRXEV] 8LI½VWX]IEVWSJ'LEQVSIYR[IVIWTIRXSRWIXXMRKYT socio-economic services to poor households living in the institution’s operational and institutional sustainability. Phnom Penh’s urban depressed areas. The institution opened an average 3 branches per year MRXLI½VWXJI[]IEVWSJMXWSTIVEXMSRWHVMZIRF]EWXVSRK HIQERHJSVWSGMEPQMGVS½RERGIMR4LRSQ4IRL

To comply with regulations, in 2009, Chamroeun was SJ½GMEPP] VIKMWXIVIH EW E GSQTER] ERH [EW GIVXM½IH F] 2006 the National Bank of Cambodia as a registered credit STIVEXSV 'LEQVSIYR FIGEQI WIPJ½RERGMRK MR  'LEQVSIYRSTIRIHMXW½VWXFVERGLIWRIEVF]XLIQEMR and successfully achieved all requirements to become market places in Phnom Penh to address the needs of E PMGIRWIH QMGVS½RERGI MRWXMXYXMSR F] 2EXMSREP &ERO SJ small market stallholders, ambulant vendors, and other Cambodia in 2011. small scale business activities. The institution also started a partnership with GRET’s SKY project to provide health 6IEPM^MRKXLEXXLIVIEVIYVFERHITVIWWIHEVIEWFI]SRH microinsurance to its partners. This scheme offered a 4LRSQ 4IRL 'LEQVSIYR WXEVXIH I\TERHMRK MXW complete health coverage to Chamroeun’s partners and operational activities to some main provincial towns in their household members, to insure access to doctors, 2009. Currently, the institution is covering 14 provinces hospitals, and pharmaceutical drugs. across Cambodia mainly in areas surrounding Tonle Sap 0EOIXLVSYKLMXWFVERGLIWERHSJ½GIW

ANNUAL REPORT 2013 5 2007 2009

Chamroeun launched a wide range of complementary To comply with regulations, Chamroeun was registered socio-economic services, including various business and with the Ministry of Commerce as a company with WSGMEPXVEMRMRKGSYVWIWGSYRWIPPMRKERHVIJIVVEPW6IEPM^MRK two shareholders namely Entrepreneurs du Monde and that there are urban depressed areas beyond Phnom Mr. Humbert Garreau de Labarre. The institution was 4IRLXLIMRWXMXYXMSRWXEVXIHI\TERHMRKMXWSTIVEXMSRWXS EPWSGIVXM½IHEWEGVIHMXSTIVEXSVJVSQXLI2EXMSREP&ERO through a new branch set up. of Cambodia. Furthermore, Chamroeun also established two more new branches in Battambang and Siem Reap provinces.

2008 2010

'LEQVSIYR GSRXMRYIH I\TERHMRK MXW STIVEXMSRW [MXLMR 'LEQVSIYR GSRXMRYIH I\TERHMRK MXW STIVEXMSRW XS and surrounding Phnom Penh areas through additional with an additional new branch FVERGLIWERHSJ½GIWHVMZIRF]EWXVSRKHIQERHWSGMEP set up. Further, to address our partner’s challenges in QMGVS½RERGI -R EHHMXMSR )RXVITVIRIYVW HY 1SRHI relation to distance between their destinations and the VIGVYMXIHE'EQFSHMER)\IGYXMZI(MVIGXSVXSXEOISZIV MRWXMXYXMSR´W FVERGL PSGEXMSRW  WEXIPPMXI SJ½GIW [IVI VIWTSRWMFMPMXMIWJVSQXLII\TEXVMEXI1EREKIV created to bring the available services closer to them. The institution also brought on board another new WLEVILSPHIV1MGVS½RERGI7SPMHEMVI*SYV]IEVWEJXIVXLI WXEVXYT'LEQVSIYRFIGEQIHWIPJ½RERGMRK

6 ANNUAL REPORT 2013 2011 2013

Two additional new branches were launched in Banteay )\TERWMSRW WXMPP GSRXMRYIH XS FIRI½X QSVI TSSV Meanchey and Kampong Thom provinces aligned with the TSTYPEXMSR [MXLMR FSXL I\MWXMRK STIVEXMSREP EVIEW institution’s strategic plan. Chamroeun fully complied with and a new provincial town of Pursat. Chamroeun also all requirements from the National Bank of Cambodia and HIZIPSTIHRI[½RERGMRKMRMXMEXMZIWWYGLEWERI[LIEPXL FIGEQIEPMGIRWIHQMGVS½RERGIMRWXMXYXMSR8LMWQEVOIH microinsurance scheme, USD loans, and clean energy an important step within the institutional development. loan to help its partners address their vulnerabilities. A Foundation was initiated to create more synergy with &I]SRH QMGVS½RERGI XLI MRWXMXYXMSR WXEVXIH TVSZMHMRK the institution to help the poor address their challenges scholarship awards to 84 children of the partners ERHHMJ½GYPXMIW through its Foundation. Moreover, additional paid-up GETMXEPF]I\MWXMRKWLEVILSPHIVW[EWWYGGIWWJYPP]MRNIGXIH to continue sustaining the growth of the institution’s activities. 2012

To sustain the growth of Chamroeun’s activities, a capital increase was done early 2012 bringing three new shareholders with whom Chamroeun already has GPSWIXMIWSRFSEVH1SVISZIVSTIVEXMSREPI\TERWMSRWXMPP continued to two additional new provinces, Takeo and Kampot. Socio-economic services were also re-adapted to the needs of Chamroeun’s partners. Particularly, the training method was initially changed from compulsory ERHHIWGVMTXMZIEXXLIMRWXMXYXMSR´WSJ½GIWXSZSPYRXEV]ERH participatory at the community level with the modules mainly focused on Financial Literacy.

ANNUAL REPORT 2013 7 Vision Mission

±% PIEHMRK 'EQFSHMER WSGMEP QMGVS½RERGI MRWXMXYXMSR ±8S MQTVSZI XLI PMZIPMLSSHW WOMPPW ERH WIPJGSR½HIRGI working to achieve positive and lasting changes in the of poor families in Cambodia by providing them a wide livelihoods of economically active poor families in a VERKI SJ VIWTSRWMFPI QMGVS½RERGI ERH GSQTPIQIRXEV] socially responsible manner ” socio-economic services”

Core Values

Integrity: 'LEQVSIYR TVSZMHIW QMGVS½RERGI ERH Fair practices: At Chamroeun, we ensure that the complementary socio-economic services to the poor services we provide to our partners as well as the to enhance their well-being. It achieves this ethically and interactions we have with other stakeholders are not with transparent, fair, and cost effective methods. unethical or deceptive. We are committed to building relationships that are based on respect, fair treatments, and courtesy.

Quality of services: At Chamroeun, we believe that Confidentiality: Privacy of our partners and other SYVTEVXRIVWHIWIVZIXEMPSVIHEW[IPPEWIJ½GMIRXWIVZMGIW stakeholders is strictly safeguarded and stored, and their We provide these services in a convenient, proactive, and data is only used with their consent, and they are well timely manner. informed on how their data is used.

Transparency: At Chamroeun, we provide our Non-discrimination: Chamroeun considers its targeted partners and other stakeholders with complete and FIRI½GMEVMIW ERH SXLIV WXEOILSPHIVW EW ZEPYEFPI EWWIXW accurate information about the terms and conditions of VIKEVPIWWSJWI\VEGISVVIPMKMSRERHXEOIWEPPIJJSVXWXS our products and services. Information is provided in a ensure that the institution treats them in an appropriate user-friendly manner to enable them to easily understand manner. on those terms and conditions.

8 ANNUAL REPORT 2013 OPERATIONAL PERFORMANCE OPERATIONAL COVERAGE

ODDAR MEAN CHEY

PREAH VIHEAR RATTANAKIRI BANTEAY MEAN CHEY SIEM REAP STUENG TRENG

BATTAMBANG TONLE SAP LAKE PAILIN KAMPONG THOM KRATIE MONDULKIRI

PURSAT KAMPONG CHHNANG KAMPONG CHAM

PREY PHNOM VENG KAMPONG PENH KOH KONG KANDAL SPEU

SVAY RIENG

KAMPOT PREAH TAKEO SIHANOUK KEP

Number of Number of Partners Province DistrictsCommunes Villages Male Female Total

Banteay Meanchey 3 23 133 436 2,371 2,807

Battambang 9 58 272 525 3,346 3,871

Kampong Cham 12 59 385 661 5,090 5,751 Kampong Chhnang 4 16 87 186 1,019 1,205

Kampong Speu 5 39 334 553 3,072 3,625

Kampong Thom 6 39 216 443 3,562 4,005

Kampot 5 39 119 189 1,836 2,025

Kandal 11 106 663 1,530 9,468 10,998

Phnom Penh 8 96 717 1,515 6,410 7,925

Prey Veng 2 7 22 56 523 579

Pursat 4 14 97 82 1,372 1,454

Siem Reap 7 42 282 618 4,093 4,711

Takeo 6 38 291 521 2,914 3,435

Kep 1 1 2 2 26 28

Total 83 577 3,620 7,317 45,102 52,419

ANNUAL REPORT 2013 9 SCALING UP OUTREACH TO MORE POOR HOUSEHOLDS

Four additional service points were set up in the capital town of , Chbar Morn and Kong Pisei districts SJ/EQTSRK7TIYTVSZMRGIERH'LSYOHMWXVMGXSJ/EQTSXTVSZMRGIMR*YVXLIVQSVIEPPWEXIPPMXISJ½GIWMRMXMEPP]TYX in place within the previous few years to reach more poor families were completely upgraded to full district branches to better serve the targeted partners as well as to comply with the recent Prakas issued by the National Bank of Cambodia. By year end, Chamroeun had 40 service points (15 main branches and 25 district branches) within 14 main serving more than 52,000 poor households with a loan portfolio of about KHR 25 Billion ETTVS\MQEXIP]97(1MPPMSR [LIVIPSERWM^IMWSRP]97(TIVTEVXRIVXLIWQEPPIWXEQSYRX[MXLMRXLIMRHYWXV]

SAMNANG AND HER STATUE MAKING BUSINESS

STARTING UP A BUSINESS NOT A PIECE OF CAKE Samnang, 52, is a small entrepreneur living in a seven-member family in urban Kandal provincial town.

In 2003, Samnang and her husband decided to start their own business, producing statues, thanks to the knowledge and skills they have learned from her parents. They met ZEVMSYWGLEPPIRKIWHYVMRKXLIWXEVXYTTLEWIWYGLEW½RHMRK a proper place and attracting potential customers since they moved from their homeland to set up such business in a new area. All members in the family worked very hard together a micro loan of KHR 400,000 to add to with the family’s MRXLIFYWMRIWW[MXLSYXLMVMRKER]I\XVE[SVOIVWERHQEHI savings to buy more materials for producing statues. Thank around 15 US Dollar per day including operating costs and to the loan from Chamroeun, after several loan cycles, the raw materials for the whole business while rental cost of the family could raise their loan amount to 2,000,000 Khmer location alone was up to 80 US Dollar per month. Riel or 500 US Dollar to support their business operations. Their income is now between 50 and 70 US Dollar per DREAM COMES TRUE WITH FIRST EVER ACCESS day. After completing this loan cycle, she plans to request a TO FINANCIAL SERVICE FROM CHAMROEUN bigger loan amount to buy more materials and equipment XSWYTTSVXXLII\TERWMSRSJXLIMVFYWMRIWWEGXMZMX] 7EQRERK LEW E HVIEQ XS I\TERH LIV FYWMRIWW XS FI E bigger one one day so that they can have more choices and different statues to attract more customers. In 2006, she JSYRH'LEQVSIYRERHETTPMIHJSVXLI½VWXIZIVPSER

10 ANNUAL REPORT 2013 NEW FINANCING INITIATIVES TO HELP THE POOR ADDRESS THEIR VULNERABILITIES

6IEPM^MRKXLIJEGXXLEXEQSRKWXMXWTEVXRIVWWSQISJXLIQXVERWEGXIHXLIMVFYWMRIWWEGXMZMXMIWMR97(GYVVIRG]IMXLIVMR selling or buying or both, Chamroeun developed a USD Loan to help them reduce transaction and conversion costs. This new loan product was started as a pilot within and surrounding Phnom Penh areas early 2013. So far, it has demonstrated a good portfolio quality and trend.

*MRERGMRKMRMXMEXMZIXS[EVHWGPIERIRIVK]WSPYXMSRWWYGLEWWSPEVOMXWERHIJ½GMIRXWXSZIW[IVIEPWSMRHIZIPSTQIRXYRHIV the “Access to Clean Energy Program” project mainly funded by the Frankfurt School in collaboration with the United Nations Environment Program (UNEP). New loan products were initiated to address the issue of Chamroeun’s partners who are living in the provincial areas and are challenged with energy consumption either having no access to proper energy solutions or only being able to access ones with high consumption costs. This project will not only enable Chamroeun’s TEVXRIVWXSEGGIWWIJ½GMIRXERHGPIERIRIVK]WSPYXMSRWFYXEPWSGSRXVMFYXIXSXLITVSQSXMSRSJIRZMVSRQIRXEPP]JVMIRHP] products.

INDIVIDUAL LOAN

Chamroeun Loan (CL): HIZIPSTIHJSVTSSVJEQMPMIW[LSVIUYMVIEWQEPPGETMXEPXSI\TERHSVWXEVXYTEWQEPP income generating business such as production, trade and commerce, services, …

Entrepreneur Loan (EL): targeted small entrepreneurs within Chamroeun’s targeted areas who need medium WM^IHPSERWXSSTIVEXIXLIMVFYWMRIWWIW QER])0TEVXRIVWLEZIKVEHYEXIHJVSQ Chamroeun Loan or Developing Loan and who need larger amounts.

Social Emergency Loan (SEL): HIZIPSTIHXSWYTTSVX'LEQVSIYR´WTEVXRIVW[LSJEGIYRI\TIGXIHGEPEQMXMIWWYGL EWREXYVEPHMWEWXIVWXVEJ½GEGGMHIRXWERHWIVMSYWMPPRIWWIW

GROUP LOAN

Developing Loan (DL): designed for poor families who are unable to meet eligibility to access the Chamroeun 0SEREWXLI]PMZIMRVIRXIHEGGSQQSHEXMSRWERHGERRSX½RHGSQEOIV W [LSQIIX the minimum criteria required by the institution.

ANNUAL REPORT 2013 11 NUMBER OF LOAN BREAKDOWN BY PRODUCT TYPE:

24,273

17,708

10,438

5

Chamroeun Loan Enterpreneur Social Emergency Developing Loan Loan Loan

For the initial point of her business, she did not have much capital to invest and purchase various kinds of food whereas she could generate only 15,000 Khmer Riel (3.75 USD) per a day from selling hot dog, meatballs, chicken, and drinks. From XLMWMRGSQIWLIGSZIVIHHEMP]JEQMP]I\TIRWIERH her home rental fee, 30 US Dollar per month. During this time, she found it challenging to save, considering her small income.

She then decided to apply for a loan of 600,000 /LQIV 6MIP JVSQ 'LEQVSIYR XS I\TERH LIV business activity. This amount enabled her to purchase more food so that she could raise up her income to 25,000 Khmer Riel (6.25 USD) per day. Presently, she can save up to 50 US Dollar per month from her daily business income source.

With the third cycle of loan, she got 2,000,000 Khmer Riel from Chamroeun to invest in her business with a return on investment of up to 50,000 Khmer Riel (12.5 US Dollar) per day.

From the progress of her business, she was able to A STRUGGLING BREADWINNER reach her ultimate destination which was to buy her own small house. “Loans from Chamroeun Sareth is a 45-year-old widow with two daughters. contributed to improving the living conditions of To improve their living conditions, she runs her own my family and enabled me to buy my own small business roasting chicken, preparing beef meatballs, house” she said. and selling drinks over the past 13 years.

12 ANNUAL REPORT 2013 NEW MICROINSURANCE SCHEME FOR BETTER HEALTH TREATMENT

Very few poor households in Cambodia have access to &EWIHSRXLITSWMXMZIVIWYPXWMRXIVQWSJFSXL½KYVIWERH JSVQEPMRWYVERGIXLEXTVSXIGXWEKEMRWXVMWOWERHYRI\TIGXIH PIZIP SJ WEXMWJEGXMSR I\TVIWWIH EQSRKWX XLI MRWXMXYXMSR´W events such as the death of a breadwinner, illness, or loss partners who are engaging in the scheme, Chamroeun of an asset, livestock, and housing. Along with the efforts TPERWXSJYPP]I\XIRHXLMWTVSKVEQEGVSWWMXWSTIVEXMSREP to reduce above mentioned vulnerabilities of our targeted areas from 2014 onward. partners, Chamroeun actively supported its Foundation (Chamroeun Foundation Association, “CFA”) in the Key Performance Indicators 2013 initiative to introduce a health microinsurance scheme under a partnership with PRÉVOIR (KAMPUCHEA) SJSTIVEXMRKSJ½GIW     MICRO-LIFE INSURANCE PLC., to its partners as a part of helping them mitigate risks and manage shocks since # of partners insured 2,379 early 2013. # of claims 10 To take part to this scheme, a partner or his or her household member is required to pay a small amount of TVIQMYQ[LMGLMWETTVS\MQEXIP]97(TIVQSRXLXS GSZIVLSWTMXEPM^EXMSRERHEGGMHIRXEPHMWEFMPMX]ERHHIEXL

ANNUAL REPORT 2013 13 SOCIAL PERFORMANCE

Chamroeun’s primary objective is to have a strong and 7SGMEP TIVJSVQERGI MW E TVMSVMX] EW VI¾IGXIH MR XLI lasting positive impact on the livelihoods of the very poor, HI½RMXMSR SJ SYV XEVKIX TSTYPEXMSR XLI HIWMKR SJ XLI economically active households in Cambodia by providing services, and the choice of the business model. XLIQ[MXLE[MHIVERKISJVIWTSRWMFPIQMGVS½RERGIERH complementary socio-economic services.

SOCIO-ECONOMIC SERVICES FOR A MORE MEANINGFUL IMPACT

-XMW'LEQVSIYR´W½VQFIPMIJXLEX½RERGMEPWIVZMGIWEPSRI Skill training sessions were proposed to the partners EVI MRWYJ½GMIRX XS QEOI E WMKRM½GERX HMJJIVIRGI JSV XLI SR E ZSPYRXEV] FEWMW MR I\GLERKI JSV E WQEPP W]QFSPMG households it targets. Socio-economic services were fee. They cover the topics of cooking, cake making, fruit launched early 2007 as a complementary service to the GEVZMRK EVXM½GMEP ¾S[IV QEOMRK ERH QERMGYVI -R  ½RERGMEP WIVZMGIW TVSZMHIH &] TVSTSWMRK XVEMRMRK ERH 52 participants attended 508 sessions of skill training. counselling, it aims to serve its partners in a more effective manner and give them means by which to improve their In addition to Fin-Lit and skill training modules, Chamroeun WIPJGSR½HIRGIERHWOMPPW also delivered social training on several topics such as domestic violence, health care, nutrition, danger of drug, The new business training modules which mainly and environmental protection. In 2013, there were 1,952 JSGYW SR ½RERGMEP PMXIVEG] [IVI JYPP] MRXVSHYGIH EGVSWW participants who attended 171 sessions. To make it more FVERGLIWERHSJ½GIW8LIWIXVEMRMRKWIWWMSRWEVITVSZMHIH IJ½GMIRXERHVIWTSRHXSXLIGYVVIRXWSGMEPMWWYIWJEGIH in community base on a voluntary participation, are by our partners and the communities as a whole, the JVII SJ GLEVKI ERH GSZIV ½ZI XSTMGW WTIRHMRK WEZMRK social training modules have been in review since mid- prevention of over-indebtedness, household budgeting, ERHEVII\TIGXIHXSFIEZEMPEFPIJSVTMPSXXIWXMRK and basic marketing, targeting Chamroeun’s partners early 2014. and their relatives, friends, and neighbors. In 2013, 1,398 WIWWMSRW[IVIGEVVMIHSYXSR½RERGMEPPMXIVEG]XSTMGW[MXL Business and social counselling sessions were also ER SYXVIEGL SJ  TEVXMGMTERXW (IWTMXI WMKRM½GERX proposed to the partners to help on issues related to their TVSKVIWW XLI ½KYVIW SJ FYWMRIWW ERH ½RERGMEP PMXIVEG] families or other social matters or to provide advice and XVEMRMRK HVSTIH WMKRM½GERXP] GSQTEVIH XS XLI TVIZMSYW assistance related to the running of their small businesses. years with the fact that previous training methodologies -RGSYRWIPPMRKWIWWMSRW[IVII\IGYXIHERHEVI [IVI GSQTYPWSV] ERH SJ½GI FEWIH ERH RSVQEPP] [EW GYVVIRXP]TIRHMRKJSVVI½RIQIRXWMRGI%TVMP offered before loan disbursement sessions.

14 ANNUAL REPORT 2013 Along with Chamroeun’s continued growth in the Entrepreneurs du Monde was actively involved in a full operation areas, additional dedicated socio-economic review of the socio-economic services and provided SJ½GIVW[IVIVIGVYMXIH&]XLIIRHSJXLIVI[IVI GPEWWIW JSV XVEMRIVW XS XLI RI[P]VIGVYMXIH SJ½GIVW XS WSGMSIGSRSQMGSJ½GIVW[SVOMRKEGVSWW'LEQVSIYR´W enable them to carry out livelier, more engaging the FVERGLIWERHSJ½GIW training sessions and supported services. It is planned that this work will continue in 2014 while the other socio-economic services undergo their revision process.

Key Performance Indicators 2011 2012 2013

Financial Literacy and Business Training

Sessions 1,839 2,450 1,398

Participants 44,663 44,148 11,080

Training on Social Topics

Sessions 2,335 2,142 171

Participants 49,701 37,933 1,952

Number of Counselling Sessions 2,132 4,518 983

ANNUAL REPORT 2013 15 SOCIAL PERFORMANCE MONITORING

To ensure it is indeed meeting its target population, To support its efforts to fully align its targeting with its Chamroeun uses a poverty assessment questionnaire social objectives and to measure the progress of the which is systematically asked to all entering partners socio-economic status of its partners, Chamroeun and then at every two-cycle interval. This enables the institution to make sure it reaches out to its target performance using various mechanisms such as Cerise’s population, and it also gives an indication on the changes Social Performance Indicators (SPI), Universal Standards in the socio-economic situation of the partners over time. for Social Performance Management initiated by Social annually to give a clear picture of the socio-economic

Chamroeun has also engaged with a project initiated and However, as the tool was internally designed with the support from Entrepreneurs du Monde, Chamroeun has and the Agence Francaise de Developpement since early

enables the institution to assess its practices regarding a poverty tool initiated by Grameen Foundation using client protection principles created by Smart Campaign. national socio-economic data in 2004, with the aim at within the institution to ensure that poverty data and accordingly. Geographic benchmarked with national level survey projects and Targeting particularly national socio-economic surveys. In addition, SR towards 100.0% community 80.0% Individual targeting using collectively designed tools also helps the institution 60.0% SR towards clients 40.0% Pro-poor methodology 20.0% 0.0% Targeting/ SR towards staff Range of traditional Outreach Sevices 100.0% Empowerment 80.0% Quality of services 60.0% 40.0% Client participation Social Innovative and 20.0% Adaptation of responsibility 0.0% Economic non services

Average of + Chamroeun 2012 SAEA (1 MFIs) Average of + (Plusieurs elements)+ Cambodia (9 MFIs) Peer group + (Plusieurs elements)+ Asia+Young (16 MFIs)

16 ANNUAL REPORT 2013 EXTENDING CHAMROEUN’S ACTIVITIES BEYOND SOCIAL MICROFINANCE

Late 2011, Chamroeun created the Chamroeun [EWXLI½VWX]IEVXLEXXLIJSYRHEXMSRPEYRGLIHMXW Foundation Association; as an initiative contributing to scholarship program. Our partners who have children poverty reduction in Cambodia through its involvement studying at primary school, secondary school, high school, in socio-economic, educational, and environmental and university had a chance to apply for scholarship development. The foundation strongly believes that these award. There were 598 applicants who applied for this QEMRTVMSVMXM^IHEGXMZMXMIW[MPPFVMRKJYVXLIVFIRI½XWXS scholarship. As a result, following the selection process Chamroeun’s partners and their communities as a whole. and the eligibility requirements, 84 applicants mainly from primary school, won the scholarship awards. Each The foundation provides scholarships to vulnerable scholarship award included a bicycle as a means of poor students to enable them to free themselves from XVERWTSVXEXMSRERHETEGOEKISJWXYH]QEXIVMEPWWYJ½GMIRX ignorance through access to education and appropriate for a full year of schooling. skills, so that they can earn income and support their living in the future. Besides, the foundation wishes to provide funding to the like-minded programs of local and international NGOs and initiate its own development programs to help reduce vulnerabilities of Chamroeun’s partners and their communities.

ANNUAL REPORT 2013 17 REVISED STRATEGIC PLAN FOR 2013-17

Late 2012, several strategic planning workshops were Strengthening the institution’s social mission SVKERM^IH XS MRZSPZI QEREKIVW JVSQ EPP PIZIPW SJ XLI SVKERM^EXMSRMRXLIJSVQYPEXMSRSJXLI½ZI]IEVTPERJSV ˆ)RWYVIIJJIGXMZIGPMIRXTVSXIGXMSRERHGYWXSQIV Chamroeun. The resulting strategic plan was validated by relationship management; the Board of Directors early 2013. Such strategic plan ˆ-QTVSZMRKWSGMSIGSRSQMGWIVZMGIW was also reviewed and revised by the management team ˆ)RLERGIWSGMEPTIVJSVQERGIQSRMXSVMRK and Board of Directors early 2014. ˆ7YTTSVX'LEQVSIYR*SYRHEXMSR%WWSGMEXMSR´WEGXMZMXMIW ˆ3JJIVEWXMQYPEXMRKERHVIWTIGXJYP[SVOMRKIRZMVSRQIRX Chamroeun’s strategy for 2013-17 remains focused on ˆ&YMPH'LEQVSIYR´WFVERHWSGMEPMQEKI its three key strategic orientations: reaching out to more poor micro-entrepreneurs through adapted products and 6IEGLMRKEWSYRHWYWXEMREFMPMX]ERHTVS½XEFMPMX] services, strengthening the institution’s social mission,and VIEGLMRKEWSYRHWYWXEMREFMPMX]ERHTVS½XEFMPMX];MXLWYGL ˆ-QTPIQIRXEWSYRH-8ERH1-7W]WXIQW key strategic directions, the following objectives were ˆ%XXVEGXRI[WLEVILSPHIVWERHMRZMXIRI[ HI½RIH board members; ˆ-RGVIEWIERHHMZIVWMJ]JYRHMRKWSYVGIW ˆ'SRHYGXVIKYPEVI\XIVREPVIZMI[W

Reaching out to more poor micro entrepreneurs ˆ%GUYMVIER1(-PMGIRWI through adapted products and services ˆ)RWYVIIJJIGXMZIMRXIVREPGSRXVSPERHVIWSYVGIYXMPM^EXMSR and sound risk management;

ˆ-RGVIEWISYXVIEGLXSTSSVJEQMPMIW ˆ'SQTP][MXLETTPMGEFPIPE[WERHVIKYPEXMSRW ˆ%GLMIZIELMKLPIZIPSJGPMIRXWEXMWJEGXMSR ˆ4VSZMHIEJJSVHEFPITVSHYGXWERHWIVZMGIWXEMPSVIHXS clients’ needs.

18 ANNUAL REPORT 2013 GOVERNANCE SHAREHOLDERS AND SHAREHOLDING STRUCTURE

NAME TYPE # SHARE KHR’000 % SHARE

Entrepreneurs du Monde French NGO 34,757 1,737,850 35.95%

1MGVS½RERGI7SPMHEMVI French Company 19,310 965,500 19.97%

GCAMF Int. Foundation 19,310 965,500 19.97%

Ms. Sophie Dulac Individual 11,000 150,000 11.38%

Chamroeun Staff Association Cambodian Company 10,602 530,100 10.97%

Mr. Humbert Garreau de Labarre Individual 1,702 85,100 1.76%

Entrepreneurs du Monde 1MGVS½RERGI7SPMHEMVI

Entrepreneurs du Monde works in developing countries 1MGVS½RERGI7SPMHEMVI[EWGVIEXIHF])RXVITVIRIYVWHY to help the most impoverished families launch or develop Monde in 2010 as an investment vehicle for emerging small business activities and improve their living conditions WSGMEPQMGVS½RERGISVKERM^EXMSRWXLEXRIIHPSERGETMXEPXS XLVSYKLWSGMEPQMGVS½RERGIERHWSGMEPIRXVITVIRIYVWLMT YTWGEPIXLIMVEGXMZMXMIWXSWIVZIQSVIGPMIRXW1MGVS½RERGI Today, Entrepreneurs du Monde is one of Chamroeun’s Solidaire entered Chamroeun in July 2010. main shareholders and brings technical support in various EWTIGXWXSXLIMRWXMXYXMSREWETEVXRIVSVKERM^EXMSR

ANNUAL REPORT 2013 19 +VEQIIR'VIHMX%KVMGSPI1MGVS½RERGI QMGVS½RERGI MRWXMXYXMSRW E GSQTPIXI VERKI SJ ½RERGMRK Foundation products and services in a spirit of partnership. It targets institutions adhering to best governance, transparency, +VEQIIR 'VqHMX %KVMGSPI 1MGVS½RERGI *SYRHEXMSR and consumer protection practices. It focuses primarily (GCAMF) was founded in 2008 by Crédit Agricole SA SRQMGVS½RERGIMRWXMXYXMSRWHIHMGEXIHXSEKVMGYPXYVIERH MR TEVXRIVWLMT [MXL  2SFIP 4IEGI 4VM^I [MRRIV VYVEPHIZIPSTQIRXEW[IPPEWXLSWIWTIGM½GEPP]MRXIRHIH Professor Muhammad Yunus and the Grameen Trust. It JSV[SQIR%WERSRTVS½XSVKERM^EXMSRXLI+VEQIIR has adopted the values of its founders and puts their 'VqHMX %KVMGSPI 1MGVS½RERGI *SYRHEXMSR GSRHYGXW MXW commitment into practice by supporting the development activities in a manner that allows it to preserve the €50 SJQMGVS½RERGIMRWXMXYXMSRWERHJEGMPMXEXMRKXLIIQIVKIRGI million endowment contributed by its founders. Presently, of “social businesses” in developing countries. It offers it also lends funds to Chamroeun.

MS. SOPHIE DULAC MR. HUMBERT GARREAU DE LABARRE

MS. SOPHIE DULAC MR. HUMBERT GARREAU DE LABARRE

Ms. Sophie Dulac has been Vice President of Publicis Mr. Garreau de Labarre invested in Chamroeun in Groupe S.A. since 1999. She began her career as February 2009 as one of the founding shareholders the founder and managing director of a recruitment [LIRMXVIKMWXIVIHEWETVMZEXIGSQTER],ILEWI\XIRWMZI counselling company and has been the Chair of the movie- I\TIVMIRGIMRXLIFEROMRKWIGXSVERHLEWFIIREGXMZIP] theatre company Les Ecrans de Paris since 2001. She also involved as a board member of the institution until early QEREKIW7STLMI(YPEG4VSHYGXMSRW ½PQTVSHYGXMSR ERH 2012. 7STLMI(YPEG(MWXVMFYXMSR ½PQHMWXVMFYXMSR 1VW(YPEG LEWFIIR4VIWMHIRXSJXLI'LEQTW)P]WqIW½PQJIWXMZEP since 2012.

Chamroeun Staff Association Chamroeun Staff Association (CSA) was established and registered in September 2011 with the aim of promoting sense of ownership amongst Chamroeun’s management and staff.

20 ANNUAL REPORT 2013 BOARD OF DIRECTORS

MS. HÉLÈNE KERAUDREN MR. DAVID MOOS MR. PHILIPPE GUICHANDUT MR. GRÉGOIRE HÉAULME MR. FRANCK RENAUDIN 1 2 3 4 5 CHAIRPERSON MEMBER MEMBERINDEPENDENT MEMBER MEMBER

1 Hélène, representative of Entrepreneurs du Monde, worked for 9 years as management controller in the private sector, in France and abroad, before joining Entrepreneurs du Monde in 2003. As Finance and 1-7 QEREKIV WLI ½VWX WTIRX  QSRXLW MR ,EMXM FIJSVI NSMRMRK XLILIEHSJ½GIMR*VERGIERHWYTTSVXMRK Entrepreneurs du Monde’s other partner MFIs worldwide. In 2010, Hélène moved to Cambodia and served as Country Coordinator (Cambodia, Laos, and Vietnam) until late 2013. Hélène graduated from ESCP School of management, majoring in Finance and earned a degree in Mandarin Chinese from INALCO in France. She is also serving as Chairperson of Board Risk Management Committee of Chamroeun.

2 (EZMHEVITVIWIRXEXMZISJ1W7STLMI(YPEGLEWSZIV]IEVWSJI\TIVMIRGI[SVOMRKMRXLI½RERGMEPMRHYWXV]MR ZEVMSYWMRWXMXYXMSRWXLI'-'+VSYTERHXLI'VqHMX%KVMGSPI+VSYT-R(EZMHGSJSYRHIH*MRIR^E-RZIWXMWWIQIRX %PXIVREXMJTEVXSJ*MRIR^E+VSYTE½VQJSGYWIHSRHMWXVMFYXMSRERHGSRWYPXMRKMR%WWIX1EREKIQIRX WMRGI *MRIR^ELEWFIIREHZMWMRKMRWXMXYXMSREPMRZIWXSVWERH*EQMP]3J½GIWJSVXLIMVMRZIWXQIRXWMRXLIQMGVS½RERGIWIGXSV  David graduated from the Institut Supérieur de Gestion (Paris) and the Conservatoire National des Arts et Métiers (Paris). David is treasurer of a French education NGO and was elected as counsellor national of a large French NGO.

3 4LMPMTTI VITVIWIRXEXMZI SJ +VEQIIR 'VqHMX %KVMGSPI 1MGVS½RERGI *SYRHEXMSR +'%1*  JVSQ  XS  [SVOIHJSVZEVMSYW*VIRGLHIZIPSTQIRX2+3WWTIRHMRKWM\SJXLSWI]IEVWMRXLI½IPHMR6[ERHE-RHMEERHXLI 4LMPMTTMRIW,I[EWMRGLEVKISJHIZIPSTQIRXERHQMGVS½RERGITVSNIGXW,IFIGEQIXLI½VWX)\IGYXMZI(MVIGXSVSJ XLI)YVSTIER1MGVS½RERGI2IX[SVO[LIRMX[EWGVIEXIHMRERHMR2SZIQFIVLINSMRIHXLI+'%1*EW Head of Development and Technical Assistance. Philippe has a Master’s degree in Urban Social Development from Université d’Evry and an MBA from the European University of San Francisco. He is also serving as Chairperson of Board Social Performance Management Committee of Chamroeun.

4 Grégoire, independent director, worked as Program Manager of Entrepreneurs du Monde in Cambodia from 2005 to 2008 to launch Chamroeun; he later became Head of Asian Programmes for Entrepreneurs du Monde in Asia. Prior to this, he had worked in Guinea and in Madagascar with NGO’s for 6 years as well as for private companies MR)YVSTIJSV]IEVW+VqKSMVIMWRS[1EVOIXMRK(MVIGXSVEX%(-)EPEVKI*VIRGLQMGVS½RERGISVKERM^EXMSRMR4EVMW Grégoire earned a Degree at ESPEME Business and Management School in France, majoring in Finance and also WXYHMIHMRERI\GLERKITVSKVEQEX,SJWXVE9RMZIVWMX]MR2I[=SVO97%,IMWEPWSWIVZMRKEW'LEMVTIVWSRSJ&SEVH Audit Committee of Chamroeun.

5 *VERGOVITVIWIRXEXMZISJ1MGVS½RERGI7SPMHEMVI[SVOIHMRXLITVMZEXIWIGXSVJSV]IEVWFIJSVINSMRMRKE*VIRGL development NGO. This took him to Haiti and the Philippines where he spent 7 years managing development and QMGVS½RERGITVSKVEQWSRXLI½IPH8LMWI\TIVMIRGIQSXMZEXIH*VERGOXSJSYRH)RXVITVIRIYVWHY1SRHIMRE WTIGMEPM^IH2+3XSFVMRKSTIVEXMSREPXIGLRMGEPERH½RERGMEPWYTTSVXXSWSGMEPQMGVS½RERGITVSKVEQWMR,EMXM%WME ERH;IWX%JVMGE*VERGOMWGYVVIRXP]WIVZMRKEW)\IGYXMZI(MVIGXSVSJ)RXVITVIRIYVWHY1SRHIERH'LEMVTIVWSRSJ 1MGVS½RERGI7SPMHEMVI*VERGOKVEHYEXIHJVSQ)(,)'QEREKIQIRXWGLSSPMR0MPPI*VERGI

ANNUAL REPORT 2013 21 KEY ACTIVITIES OF OUR SPECIALIZED COMMITTEES

The three committees set up early 2012 to strengthen In 2013, the Social Performance Management governance on Social Performance Management, Risk Committee performed four meeting sessions to closely Management, and Audit actively carry out their functions monitor the indicators of the Universal Standard for by having regular discussions and follow-up on progress Social Performance Management initiated by Social of initiatives, and actions is regularly updated to the BoD. Performance Task Forces updated to Chamroeun’s activities and regularly follow-up key indicators from the well-known social performance management tools like Cerise’s SPI. The committee also discussed as the VI½RMRKSJXLIGSHISJGSRHYGXWMREPMKRQIRX[MXLXLI RISK MANAGEMENT COMMITTEE Client Protection Principles initiated by SmartCampaign, the creation of code of ethics, developing a social The Risk Management Committee’s primary function is performance management framework for Chamroeun XSIRWYVIXLEXXLIWMKRM½GERXVMWOWJEGIHF]'LEQVSIYR ERH GSSVHMREXIH XLI WIPIGXMSR SJ XLI I\XIVREP VEXMRK EVIMHIRXM½IHYRHIVWXSSHERHEWWIWWIHERHXSGSR½VQ agency to perform a rating on the institution late 2013. that strategies and policies are in place to manage and mitigate these risks. Its members are from the Board and XLI)\IGYXMZI8IEQJSVQSVIHMVIGXERHIJ½GMIRXEGXMSRW MR. PHILIPPE GUICHANDUT CHAIRPERSON MS. EUGÉNIE CONSTANCIAS MEMBER The Risk Management Committee, in 2013, performed MR. PHENG RAKSA MEMBER ½ZI QIIXMRK WIWWMSRW XS JSPPS[YT SR TVSKVIWW SJ GSVVIGXMZI EGXMSRW XS[EVHW VMWO EWWIWWQIRX I\GIVGMWI MS. LIM SOTHEARY MEMBER done in 2012, came up with risk management reporting W]WXIQERH GSSVHMREXIH E JYPP VMWO EWWIWWQIRX I\IVGMWI done in 2013 as well as review and feedback on plan for AUDIT COMMITTEE improvements towards such risk assessment. The Audit Committee is chaired by an independent Board member. Its role is to monitor the effectiveness MS. HÉLÈNE KERAUDREN CHAIRPERSON of the internal audit and review the integrity and ETTVSTVMEXIRIWW SJ XLI MRWXMXYXMSR´W ½RERGMEP VITSVXMRK MR. PHILIPPE GUICHANDUT MEMBER 8LI %YHMX 'SQQMXXII WIPIGXW XLI I\XIVREP EYHMX ½VQ MR. SUON SOPHEA MEMBER and maintains close working relationship with them. MR. PHENG RAKSA MEMBER Chamroeun’s Chief Internal Auditor is an active member of the committee, who is a key person to ensure the MR. SLESH ROMLY MEMBER effective oversight of internal control mechanisms.

8LI%YHMX'SQQMXXIIMRIRKEKIHMR½ZIWIWWMSRWXS SOCIAL PERFORMANCE VIZMI[OI]½RHMRKWGSRHYGXEVIZMI[SR[SVOMRKTETIVW MANAGEMENT COMMITTEE and scope of works of audit department, select a new I\XIVREPEYHMX½VQJSV'LEQVSIYRJSVERHZEPMHEXI The Social Performance Management Committee was the annual plan as well as initiate the link between the set up by Chamroeun to protect the institution’s social Risk Management Committee and the Audit Committee. QMWWMSR [LMPI IRWYVMRK MXW ½RERGMEP WYWXEMREFMPMX] 8LI committee supervises the effective translation of the institution’s social mission into practices and puts a strong MR. GRÉGOIRE HÉAULME CHAIRPERSON focus on promoting best practices and monitoring social TIVJSVQERGIF]YWMRKVIGSKRM^IHXSSPWGPIEVXEVKIXWERH MS. HÉLÈNE KERAUDREN MEMBER ERHQIXVMGW8LIGSQQMXXIIFIRI½XWJVSQXLIWXVSRKWOMPPW MS. WONG SOMALY MEMBER and background of its members in social performance QEREKIQIRXERHQMGVS½RERGI

22 ANNUAL REPORT 2013 EXECUTIVE TEAM

MR. SUON SOPHEA MS. UCH PHALKUN MR. SLESH ROMLY MR. PHENG RAKSA MS. WONG SOMALY 12 34 5 CHIEF EXECUTIVE CHIEF ADMINISTRATIVE CHIEF FINANCIAL CHIEF OPERATING CHIEF INTERNAL OFFICER OFFICER OFFICER OFFICER AUDITOR

1 7STLIEWXEVXIHLMWGEVIIV[MXL'LEQVSIYREWE'LMIJ)\IGYXMZI3J½GIVMR%YKYWX,ILEWSZIV]IEVWSJ TVMZEXIFYWMRIWWERHQMGVS½RERGII\TIVMIRGIMR'EQFSHME4VMSVXSNSMRMRKXLIMRWXMXYXMSRLI[SVOIHEW3TIVEXMSRW Manager and Credit Department Manager in several MFIs. Presently, he is an MBA candidate majoring General Management at National University of Management and also holds BBA majoring in Accounting and Management. Sophea is also Chairperson of both Chamroeun Foundation Association and Chamroeun Staff Association. Besides, LIMWEPWSWIVZMRKEW&SEVHQIQFIVSJ'EQFSHME1MGVS½RERGI%WWSGMEXMSR

2 Phalkun started her career with Chamroeun as Business and Social Development Manager in February 2007 and FIGEQIE,YQER6IWSYVGIW1EREKIVMR3GXSFIV7LI[EWPEXIVTVSQSXIHXS'LMIJ,YQER6IWSYVGIW3J½GIV ERHGYVVIRXP]EW'LMIJ%HQMRMWXVEXMZI3J½GIV-RXLMWTSWMXMSRWLIQEREKIWEPPXEWOWERHHYXMIWVIPEXIHXSLYQER VIWSYVGIWXVEMRMRKERHEHQMRMWXVEXMSR&IJSVINSMRMRKMRXLIMRWXMXYXMSRWLILEHSZIV]IEVWSJ[SVOI\TIVMIRGI MRWIZIVEPTSWMXMSRW[MXLRSRKSZIVRQIRXEPSVKERM^EXMSRWERHTYFPMGWIGXSV4LEPOYRMWE1&%GERHMHEXIQENSVMRK in Business Administration at SACHAK ASIA DEVELOPMENT Institute and also holds Diploma of Engineering %WWMWXERXMR;IEZMRK8IGLRSPSK]JVSQ-:23:38I\XMPI'SPPIKIMR6YWWME

3 6SQP]NSMRIH'LEQVSIYREW*MRERGMEPERH%HQMRMWXVEXMZI1EREKIVMRERHEW'LMIJ*MRERGMEP3J½GIVMR ,IRS[QEREKIWXVIEWYV]½RERGIERHMRJSVQEXMSRXIGLRSPSK]&IJSVINSMRMRKMRXLIMRWXMXYXMSRLI[SVOIHJSVER EYHMX½VQEW7IRMSV%YHMXSVJVSQXSERHLIEPWSLEWWIZIVEP]IEVW´I\TIVMIRGI[MXLRSRKSZIVRQIRXEP SVKERM^EXMSRWERHTVMZEXIGSQTERMIWMRZEVMSYW½IPHW6SQP]LSPHW1&%QENSVMRKMR*MRERGMEP1EREKIQIRXERH EPWS&&%MR%GGSYRXMRK½IPHERH'%8,IMWGYVVIRXP]WIVZMRKEW&SEVHQIQFIVSJFSXL'LEQVSIYR*SYRHEXMSR Association and Chamroeun Staff Association.

4 6EOWEWXEVXIHLMWGEVIIV[MXL'LEQVSIYREWE'LMIJ3TIVEXMRK3J½GIVPEXI,IQEREKIWEPPXEWOWERHEGXMZMXMIW in relation to operations, quality assurance, research and development, marketing and communication, socio- IGSRSQMGWERHWSGMEPTIVJSVQERGI,ILEWSZIV]IEVWSJI\TIVMIRGIWMRQMGVS½RERGIMRZEVMSYWEWTIGXW[MXLOI] QMGVS½RERGITVEGXMXMSRIVW'YVVIRXP]6EOWEMWER1&%GERHMHEXIQENSVMRKMR1EREKIQIRXEX2EXMSREP9RMZIVWMX]SJ 1EREKIQIRXERHEPWSLSPHWE&&%WTIGMEPM^MRKMR1EVOIXMRK,IMWEPWSWIVZMRKEW'LEMVTIVWSRSJ7SGMEP4IVJSVQERGI 1EREKIQIRX'PYFSJ'EQFSHME1MGVS½RERGI%WWSGMEXMSR&SEVHQIQFIVSJ'LEQVSIYR*SYRHEXMSR%WWSGMEXMSR ERH)\IGYXMZI(MVIGXSVSJ'LEQVSIYR7XEJJ%WWSGMEXMSR

5 Somaly started her career with Chamroeun as System Administrator and Internal Auditor in 2007; she became -RXIVREP%YHMX1EREKIVMRERH½REPP]'LMIJ-RXIVREP%YHMXSVMR7LIQEREKIWEPPEYHMXXEWOWERHHYXMIW SRSTIVEXMSREP½RERGMEPMRJSVQEXMSRXIGLRSPSK]ERHSXLIVWYTTSVXJYRGXMSRW7LILEWTVIZMSYWP][SVOIHMRZEVMSYW ½IPHWWYGLEWEHQMRMWXVEXMSRGVIHMXERHMRJSVQEXMSRXIGLRSPSK]JVSQXS'YVVIRXP]7SQEP]MWER1&% candidate majoring in Finance and Banking at Phnom Penh International University and also holds a Bachelor Degree of Computer Sciences. She is also serving as Board member of Chamreoun Foundation Association and in charge of EGGSYRXMRKERH½RERGIJSV'LEQVSIYR7XEJJ%WWSGMEXMSR

ANNUAL REPORT 2013 23 EXPANDING STRUCTURE FOR BETTER SERVICE QUALITY AND INNOVATIONS

'LEQVSIYR LEH E WMKRM½GERX KVS[XL [MXLMR XLI PEWX *YRGXMSREP YRMXW MR GLEVKI SJ TIVWSRRIP FIRI½XW ERH few years in response to a strong demand for social compensation, and performance development management QMGVS½RERGI -R VIWTSRWI XS XLMW KVS[XL XLI MRWXMXYXMSR were put in place within the human resources department IRPEVKIH ERH I\TERHIH MXW WXVYGXYVI F] LEZMRK QSVI to better manage human resource management strategies WTIGMEPM^IHJYRGXMSREPHITEVXQIRXWERHYRMXWXSHIEP[MXL which include recruitment and selection, orientation and the required and job assignments, and particularly the capacity building, performance management and appraisal, development and enhancement of business processes compensation and rewards, retention, complaint handling, and internal controls. In 2013, new functional departments ERHGSR¾MGXVIWSPYXMSRW and units such as treasury, quality assurance, performance HIZIPSTQIRX ERH QEREKIQIRX TIVWSRRIP FIRI½XW ERH The Socio-economic team was also separated into business compensation, business services, and social services were WIVZMGIW ERH WSGMEP WIVZMGIW XS IRWYVI WTIGMEPM^EXMSR MR also created. dealing with support and complementary services to help Chamroeun’s partners address their business and 8LI8VIEWYV]HITEVXQIRX[EWWITEVEXIHJVSQXLI½RERGI household issues. The Business service unit is in charge department to better manage the funding operations SJ FYWMRIWW ½RERGMEP PMXIVEG] ERH WOMPP XVEMRMRK EW [IPP EW [MXLMR XLI MRWXMXYXMSR ERH MR TEVXMGYPEV XLI GEWL ¾S[ business counselling whereas the social service unit handles FIX[IIRXLIWIVZMGITSMRXWERHLIEHSJ½GI8LMWJYRGXMSREP social training, counselling, and referrals. department also plays a critical role in fund raising activities dealing with both local and international funders.

A Quality assurance unit was also separated from the operations department to ensure better control on daily operations through regular and random compliance checks adapted to quality management practices.

24 ANNUAL REPORT 2013

sehcnarB noigeR Unit Admin. Admin. Department Procurement Chief T & D T & D Admin. Officer Admin. Department

: Management : Research and Development : Supported Function : Social Performance Management : Training and Development sehcnarB noigeR Mgt. R & D SF SPM T & D HR HR Department

SPM sehcnarB noigeR Department Committee ra ti ve Human Resource Human Resource

Adm inist : : Asset and Liability Management : Human Resource : Information Technology and General Compliance : Marketing and Communication M & C Department Admin. ALM HR IT & GC M & C Chief Operating Officer sehcnarB

noigeR Operations Department Protocol Protocol Executive Committee Committee

Board Chief R & D of Directors Shareholders Department Executive Officer Executive sehcnarB noigeR

ALM Secretary

Executive Committee Unit Treasury Treasury Department Legal & Comliance Finance Finance Chief Department Financial Officer sehcnarB noigeR Business Business Committee IT Department tte e ormanc e er f

Comm i Chief Audit Audit Risk Mgt. Internal Auditor Internal Committee Committee . Mgt . P Social sehcnarB noigeR SF

Audit Team Audit Operational Team Audit ORGANIZATIONAL STRUCTURE ORGANIZATIONAL

ANNUAL REPORT 2013 25 STAFF DEVELOPMENT

Key Performance Indicators 2011 2012 2013

Number of Personnel 163 213 333

2YQFIVSJ0SER3J½GIVW 84 102 164

2YQFIVSJ7SGMS)GSRSQMG3J½GIVW 41023

Staff Turnover Ratio 10% 11% 16%

% of Female Staff 19% 26% 24%

% of Staff with Permanent Contract 47% 69% 88%

BUILDING UP OUR HUMAN CAPITAL: A KEY PRIORITY

Improving the capacity amongst Chamroeun’s Chamroeun has also provided scholarship awards for management and staff is still a key priority in 2013 as we Master and Bachelor degree to15 of its staff. To contribute strongly believe that human capital is the most valuable to building staff capacity, the institution provided 10 asset in helping build up solid foundations of an institution scholarship awards to its employees through a lucky draw and ensuring smoothness and safety when moving session as part of its annual workshop activities. JSV[EVH7IZIVEPGYWXSQM^IHXVEMRMRKGSYVWIW[SVOWLSTW scholarship programs, and coaching sessions offered in to management and employees.

As such, 48 training topics were internally offered representing at total 121-days of training during the year to 1,138 participants. Besides, we also sent out QEREKIQIRXERHWXEJJXSTEVXMGMTEXIXSI\XIVREP training courses for a total of 62-days of training on various topics during the year. Furthermore, some key staff were sent to join training courses and workshops regionally and internationally.

26 ANNUAL REPORT 2013 MOTIVATION, INSPIRATION, AND EMPOWERMENT THROUGH REWARDS AND SUCCESSION PLANNING

A reward and recognition system is not just a positive Succession planning is a new initiative recently applied tool to use with employees, but communicating on it within Chamroeun as the institution strongly believes IJJIGXMZIP] MW EPWS ER IJ½GMIRX XSSP MR IRGSYVEKMRK XLIQ that some positions are the lifeblood and backbone of XSFVMRKQSVIFYWMRIWWSTTSVXYRMXMIWXSXLISVKERM^EXMSR the institution, and it is too risky to leave them vacant. Motivation is essential to performance, development, Besides, this initiative also contributes in building career and success in the career path of an employee. While paths and retaining top performing employees. there are several methods of motivating employees, one [LMGLVIETWLYKIFIRI½XWMWVIGSKRMXMSR 7YGGIWWSVW [IVI WYGGIWWJYPP] MHIRXM½IH JSV EPP QEREKIQIRXTSWMXMSRWJVSQI\IGYXMZIPIZIPXSLIEHSJ In Chamroeun, there are various ways of staff motivation PSER SJ½GIVW [LIVIEW E GSQTVILIRWMZI XVEMRMRK GSYVWI ERH VIGSKRMXMSR MRGPYHMRK ½RERGMEP ERH RSR½RERGMEP [EW SJJIVIH XS XLSWI MHIRXM½IH WYGGIWSVW QMH-R methods, incentives, bonuses, premiums,13th and 14th addition, each management staff was encouraged to take QSRXLWEPEV]XVSTLMIWERHGIVXM½GEXIW-R'LEQVSIYR annual vacation for 2 consecutive weeks with the aim gave out an award to Kampong Thom branch for best EXTVSZMHMRKSTTSVXYRMX]JSVXLIMHIRXM½IHWYGGIWWSVWXS performance of the year and also handed out recognition physically practice regular and necessary job assignments appreciation, cash awards and acknowledgement in a real environment on his or her behalf. GIVXM½GEXIWXSXLIXSTFIWXTIVJSVQMRKWXEJJXSTFIWX performing branch, management, staff who have served Chamroeun for 5 years, the branch which maintained the best performance for several years.

ANNUAL REPORT 2013 27 Photo

RECOGNITION AND AWARDS

In 2013, Chamroeun recieved:

 'IVXM½GEXMSRSJ6IGSKRMXMSRSJ±&IWX9VFER1MGVS½RERGI²JVSQ+PSFEP&EROERH*MRERGI6IZMI[

 'IVXM½GEXMSRSJ6IGSKRMXMSRSJ±&IWX7SGMEP(VMZIR1MGVS½RERGI²JVSQ+PSFEP&EROERH*MRERGI6IZMI[

 'IVXM½GEXMSRSJ6IGSKRMXMSRSJKVEHI±&&²SR1MGVS½RERGI-RWXMXYXMSREP6EXMRKJVSQ1MGVS½RER^E6EXMRK

s  'IVXM½GEXMSRSJ6IGSKRMXMSRSJKVEHI± &&²SR7SGMEP6EXMRKJVSQ1MGVS½RER^E6EXMRK

Seal of “Pricing Transparency” from MFTranparency

28 ANNUAL REPORT 2013 AUDITED FINANCIAL STATEMENTS

REPORT OF THE BOARD OF DIRECTORS

8LI&SEVHSJ(MVIGXSVWLEWXLITPIEWYVISJWYFQMXXMRKXLIMVVITSVXXSKIXLIV[MXLXLIEYHMXIH½RERGMEPWXEXIQIRXWSJ'LEQ- VSIYR1MGVS½RERGI0MQMXIH ±XLI'SQTER]² JSVXLI]IEVIRHIH(IGIQFIV

PRINCIPAL ACTIVITY

8LITVMRGMTEPEGXMZMX]SJXLI'SQTER]MWXSTVSZMHIGVIHMXXSPSGEPGYWXSQIVWXLVSYKLMXWLIEHSJ½GIMR4LRSQ4IRLERHMXW ZEVMSYWTVSZMRGMEPERHHMWXVMGXSJ½GIWMRXLI/MRKHSQSJ'EQFSHME

FINANCIAL RESULTS

8LI½RERGMEPVIWYPXWSJXLI'SQTER]JSVXLI]IEVIRHIH(IGIQFIV[IVIEWJSPPS[W

2013 2012

KHR’000 KHR’000

4VS½XFIJSVIMRGSQIXE\ 548,714 232,590

-RGSQIXE\I\TIRWI (175,228) (82,800)

2IXTVS½XJSVXLI]IEV 373,486 149,790

DIVIDENDS

No dividend was declared or paid, and the Directors do not recommend any dividend to be paid for the year under review.

RESERVES AND PROVISIONS

8LIVI[IVIRSQEXIVMEPQSZIQIRXWXSSVJVSQVIWIVZIWERHTVSZMWMSRWHYVMRKXLI½RERGMEP]IEVSXLIVXLEREWHMWGPSWIH MRXLI½RERGMEPWXEXIQIRXW

SHARE CAPITAL

3R7ITXIQFIVXLIWLEVILSPHIVWSJ'LEQVSIYR1MGVS½RERGI0MQMXIHETTVSZIHXSMRGVIEWIXLITEMHYTWLEVI capital from KHR 3,599,900,000 to KHR 4,834,050,000. The total authorised share capital is 96,681 shares (31 December 2012: 71,998 shares) with a par value of KHR 50,000 per share.

The amendment on the Memorandum & Articles of Association of the Company was approved by the National Bank of Cambodia and the Ministry of Commerce on 29 November 2013 and on 6 February 2014 respectively.

ANNUAL REPORT 2013 29 BAD AND DOUBTFUL LOANS

&IJSVIXLI½RERGMEPWXEXIQIRXWSJXLI'SQTER][IVITVITEVIHXLI&SEVHSJ(MVIGXSVWXSSOVIEWSREFPIWXITWXSEWGIVXEMR that appropriate actions had been taken in relation to the writing off of bad loans and the making of allowance for doubtful PSERWERHWEXMW½IHXLIQWIPZIWXLEXEPPORS[RFEHPSERWLEHFIIR[VMXXIRSJJERHEHIUYEXIEPPS[ERGILEHFIIRQEHIJSV bad and doubtful loans.

At the date of this report, the Board of Directors is not aware of any circumstances, which would render the amount [VMXXIRSJJJSVFEHPSERWSVXLIEQSYRXSJEPPS[ERGIJSVHSYFXJYPPSERWMRXLI½RERGMEPWXEXIQIRXWSJXLI'SQTER] MREHIUYEXIXSER]WYFWXERXMEPI\XIRX

CURRENT ASSETS

&IJSVIXLI½RERGMEPWXEXIQIRXWSJXLI'SQTER][IVITVITEVIHXLI&SEVHSJ(MVIGXSVWXSSOVIEWSREFPIWXITWXSIRWYVI that any current assets, other than debts, which were unlikely to be realised in the ordinary course of business at their value EWWLS[RMRXLIEGGSYRXMRKVIGSVHWSJXLI'SQTER]LEHFIIR[VMXXIRHS[RXSEREQSYRX[LMGLXLI]QMKLXFII\TIGXIH to realise.

At the date of this report, the Board of Directors is not aware of any circumstances, which would render the values EXXVMFYXIHXSXLIGYVVIRXEWWIXWMRXLI½RERGMEPWXEXIQIRXWSJXLI'SQTER]QMWPIEHMRK

VALUATION METHODS

At the date of this report, the Board of Directors is not aware of any circumstances which have arisen which render EHLIVIRGI XS XLI I\MWXMRK QIXLSH SJ ZEPYEXMSR SJ EWWIXW ERH PMEFMPMXMIW MR XLI ½RERGMEP WXEXIQIRXW SJ XLI 'SQTER] EW misleading or inappropriate.

CONTINGENT AND OTHER LIABILITIES

%XXLIHEXISJXLMWVITSVXXLIVIHSIWRSXI\MWX (a)ER]GLEVKISRXLIEWWIXWSJXLI'SQTER][LMGLLEWEVMWIRWMRGIXLIIRHSJXLI½RERGMEP]IEV[LMGLWIGYVIWXLI liabilities of any other person; (b)ER]GSRXMRKIRXPMEFMPMX]MRVIWTIGXSJXLI'SQTER]XLEXLEWEVMWIRWMRGIXLIIRHSJXLI½RERGMEP]IEVSXLIVXLER in the ordinary course of its business operations.

No contingent or other liability of the Company has become enforceable or is likely to become enforceable within the TIVMSHSJX[IPZIQSRXLWEJXIVXLIIRHSJXLI½RERGMEP]IEV[LMGLMRXLISTMRMSRSJXLI(MVIGXSVW[MPPSVQE]WYFWXERXMEPP] affect the ability of the Company to meet its obligations as and when they fall due.

CHANGE OF CIRCUMSTANCES

At the date of this report, the Board of Directors is not aware of any circumstances, not otherwise dealt with in this report SVXLI½RERGMEPWXEXIQIRXWSJXLI'SQTER][LMGL[SYPHVIRHIVER]EQSYRXWXEXIHMRXLI½RERGMEPWXEXIQIRXWQMWPIEHMRK

30 ANNUAL REPORT 2013 ITEMS OF UNUSUAL NATURE

8LIVIWYPXWSJXLISTIVEXMSRWSJXLI'SQTER]JSVXLI½RERGMEP]IEV[IVIRSXMRXLISTMRMSRSJXLI&SEVHSJ(MVIGXSVW substantially affected by any item, transaction or event of a material and unusual nature.

8LIVILEWRSXEVMWIRMRXLIMRXIVZEPFIX[IIRXLIIRHSJXLI½RERGMEP]IEVERHXLIHEXISJXLMWVITSVXER]MXIQXVERWEGXMSR or event of a material and unusual nature likely, in the opinion of the Board of Directors, to affect substantially the results SJXLISTIVEXMSRWSJXLI'SQTER]JSVXLIGYVVIRX½RERGMEP]IEVMR[LMGLXLMWVITSVXMWQEHI

THE BOARD OF DIRECTORS

The members of the Board of Directors during the year and at the date of this report are:

MS. HÉLÈNE KERAUDREN, ( CHAIRMAN ) MR. FRANCK RENAUDIN, ( MEMBER ) MR. PHILIPPE GUICHANDUT, ( MEMBER ) MR. DAVID MOOS, ( MEMBER ) MR. GRÉGOIRE HÉAULME, INDEPENDENT ( MEMBER )

EVENTS SINCE THE REPORTING DATE

2SWMKRM½GERXIZIRXWSGGYVVIHEJXIVXLIFEPERGIWLIIXHEXIXLEXVIUYMVIWHMWGPSWYVISVEHNYWXQIRXSXLIVXLERXLSWIEPVIEH] HMWGPSWIHMRXLI½RERGMEPWXEXIQIRXW

DIRECTORS’ INTERESTS

No Director held any interest in the equity of the Company.

DIRECTORS’ BENEFITS

(YVMRKERHEXXLIIRHSJXLI½RERGMEP]IEVRSEVVERKIQIRXWI\MWXIHXS[LMGLXLI'SQTER]MWETEVX][MXLXLISFNIGX SJIREFPMRK(MVIGXSVWSJXLI'SQTER]XSEGUYMVIFIRI½XWF]QIERWSJXLIEGUYMWMXMSRSJWLEVIWMRSVHIFIRXYVIWSJXLI Company or any other corporate body.

7MRGIXLIIRHSJXLITVIZMSYW½RERGMEP]IEVRS(MVIGXSVSJXLI'SQTER]LEWVIGIMZIHSVFIGSQIIRXMXPIHXSVIGIMZIER] FIRI½X SXLIVXLEREFIRI½XMRGPYHIHMRXLIEKKVIKEXIEQSYRXSJIQSPYQIRXWVIGIMZIHSVHYIERHVIGIMZEFPIF]XLI (MVIGXSVWEWHMWGPSWIHMRXLI½RERGMEPWXEXIQIRXW F]VIEWSRSJEGSRXVEGXQEHIF]XLI'SQTER]SVEVIPEXIHGSVTSVEXMSR [MXLE½VQSJ[LMGLXLI(MVIGXSVMWEQIQFIVSV[MXLEGSQTER]MR[LMGLXLI(MVIGXSVLEWEWYFWXERXMEP½RERGMEPMRXIVIWX SXLIVXLEREWHMWGPSWIHMRXLI½RERGMEPWXEXIQIRXW

ANNUAL REPORT 2013 31 RESPONSIBILITIES OF THE BOARD OF DIRECTORS IN RESPECT OF THE FINANCIAL STATEMENTS

8LI&SEVHSJ(MVIGXSVWMWVIWTSRWMFPIJSVEWGIVXEMRMRKXLEXXLI½RERGMEPWXEXIQIRXWTVIWIRXJEMVP]MREPPQEXIVMEPVIWTIGXW XLI½RERGMEPTSWMXMSRSJXLI'SQTER]EWEX(IGIQFIVERHMXW½RERGMEPTIVJSVQERGIERHMXWGEWL¾S[WJSVXLI]IEV XLIRIRHIH-RTVITEVMRKXLIWI½RERGMEPWXEXIQIRXWXLI&SEVHSJ(MVIGXSVWMWVIUYMVIHXS

(i) adopt appropriate accounting policies which are supported by reasonable and prudent judgments and estimates and then apply them consistently; (ii) comply with Cambodian Accounting Standards and the guidelines of the National Bank of Cambodia relating the TVITEVEXMSRERHTVIWIRXEXMSRSJXLI½RERGMEPWXEXIQIRXWSVMJXLIVILEZIFIIRER]HITEVXYVIWMRXLIMRXIVIWXSJ XVYIERHJEMVTVIWIRXEXMSRIRWYVIXLEXXLIWILEZIFIIRETTVSTVMEXIP]HMWGPSWIHI\TPEMRIHERHUYERXM½IHMRXLI ½RERGMEPWXEXIQIRXW (iii) maintain adequate accounting records and an effective system of internal controls; (iv) TVITEVIXLI½RERGMEPWXEXIQIRXWSREKSMRKGSRGIVRFEWMWYRPIWWMXMWMRETTVSTVMEXIXSEWWYQIXLEXXLI'SQTER] will continue operations in the foreseeable future; and (v) control and direct effectively the Company in all material decisions affecting the operations and performance and EWGIVXEMRXLEXWYGLLEZIFIIRTVSTIVP]VI¾IGXIHMRXLI½RERGMEPWXEXIQIRXW

8LI&SEVHSJ(MVIGXSVWGSR½VQWXLEXXLI]LEZIGSQTPMIH[MXLXLIEFSZIVIUYMVIQIRXWMRTVITEVMRKXLI½RERGMEPWXEXIQIRXW

APPROVAL OF THE FINANCIAL STATEMENTS

-LIVIF]ETTVSZIXLIEGGSQTER]MRK½RERGMEPWXEXIQIRXW[LMGLTVIWIRXJEMVP]MREPPQEXIVMEPVIWTIGXWXLI½RERGMEPTSWMXMSR SJXLI'SQTER]EWEX(IGIQFIVERHMXW½RERGMEPTIVJSVQERGIERHMXWGEWL¾S[WJSVXLI]IEVXLIRIRHIHMR accordance with Cambodian Accounting Standards and the guidelines of the National Bank of Cambodia relating to the TVITEVEXMSRERHTVIWIRXEXMSRSJ½RERGMEPWXEXIQIRXW

On behalf of the Board of Directors

SUON SOPHEA 'LMIJ)\IGYXMZI3J½GIV

Phnom Penh, Kingdom of Cambodia 9 May 2014

32 ANNUAL REPORT 2013 REPORT OF THE INDEPENDENT AUDITORS

TO THE SHAREHOLDERS CHAMROEUN MICROFINANCE LIMITED

;ILEZIEYHMXIHXLIEGGSQTER]MRK½RERGMEPWXEXIQIRXWSJ'LEQVSIYR1MGVS½RERGI0MQMXIH ±XLI'SQTER]² [LMGL comprise the balance sheet as at 31 December 2013, and the income statement, statement of changes in equity and WXEXIQIRXSJGEWL¾S[WJSVXLI]IEVXLIRIRHIHERHRSXIWGSQTVMWMRKEWYQQEV]SJWMKRM½GERXEGGSYRXMRKTSPMGMIWERH SXLIVI\TPEREXSV]MRJSVQEXMSREWWIXSYXSRTEKIWXS

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

1EREKIQIRXMWVIWTSRWMFPIJSVXLITVITEVEXMSRERHJEMVTVIWIRXEXMSRSJXLIWI½RERGMEPWXEXIQIRXWMREGGSVHERGI[MXL Cambodian Accounting Standards and the guidelines of the National Bank of Cambodia relating to the preparation and TVIWIRXEXMSRSJXLI½RERGMEPWXEXIQIRXWERHJSVWYGLMRXIVREPGSRXVSPEWQEREKIQIRXHIXIVQMRIWMWRIGIWWEV]XSIREFPI XLITVITEVEXMSRSJ½RERGMEPWXEXIQIRXWXLEXEVIJVIIJVSQQEXIVMEPQMWWXEXIQIRX[LIXLIVHYIXSJVEYHSVIVVSV

AUDITORS’ RESPONSIBILITY

3YVVIWTSRWMFMPMX]MWXSI\TVIWWERSTMRMSRSRXLIWI½RERGMEPWXEXIQIRXWFEWIHSRSYVEYHMX;IGSRHYGXIHSYVEYHMXMR accordance with Cambodian International Standards on Auditing. Those standards require that we comply with ethical VIUYMVIQIRXWERHTPERERHTIVJSVQXLIEYHMXXSSFXEMRVIEWSREFPIEWWYVERGIEFSYX[LIXLIVXLI½RERGMEPWXEXIQIRXWEVI free from material misstatement.

%REYHMXMRZSPZIWTIVJSVQMRKTVSGIHYVIWXSSFXEMREYHMXIZMHIRGIEFSYXXLIEQSYRXWERHHMWGPSWYVIWMRXLI½RERGMEP statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement SJXLI½RERGMEPWXEXIQIRXW[LIXLIVHYIXSJVEYHSVIVVSV-RQEOMRKXLSWIVMWOEWWIWWQIRXW[IGSRWMHIVMRXIVREPGSRXVSP VIPIZERXXSXLIIRXMX]´WTVITEVEXMSRERHJEMVTVIWIRXEXMSRSJXLI½RERGMEPWXEXIQIRXWMRSVHIVXSHIWMKREYHMXTVSGIHYVIWXLEX EVIETTVSTVMEXIMRXLIGMVGYQWXERGIWFYXRSXJSVXLITYVTSWISJI\TVIWWMRKERSTMRMSRSRXLIIJJIGXMZIRIWWSJXLIIRXMX]´W internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness SJEGGSYRXMRKIWXMQEXIWQEHIF]QEREKIQIRXEW[IPPEWIZEPYEXMRKXLISZIVEPPTVIWIRXEXMSRSJXLI½RERGMEPWXEXIQIRXW

;IFIPMIZIXLEXXLIEYHMXIZMHIRGI[ILEZISFXEMRIHMWWYJ½GMIRXERHETTVSTVMEXIXSTVSZMHIEFEWMWJSVSYVEYHMXSTMRMSR

ANNUAL REPORT 2013 33 OPINION

-RSYVSTMRMSRXLI½RERGMEPWXEXIQIRXWTVIWIRXJEMVP]MREPPQEXIVMEPVIWTIGXWXLI½RERGMEPTSWMXMSRSJ'LEQVSIYR1MGVS½RERGI 0MQMXIHEWEX(IGIQFIVERHMXW½RERGMEPTIVJSVQERGIERHMXWGEWL¾S[WJSVXLI]IEVXLIRIRHIHMREGGSVHERGI with Cambodian Accounting Standards and the guidelines of the National Bank of Cambodia relating to the preparation ERHTVIWIRXEXMSRSJ½RERGMEPWXEXIQIRXW

OTHER MATTER

8LI½RERGMEPWXEXIQIRXWSJXLI'SQTER]EWEXERHJSVXLI]IEVIRHIH(IGIQFIV[IVIEYHMXIHF]ERSXLIV EYHMXSVW[LSI\TVIWWIHERYRQSHM½IHSTMRMSRSRXLSWIWXEXIQIRXWSR%TVMP

For KPMG Cambodia Ltd

NGE HUY Audit Partner

Phnom Penh, Kingdom of Cambodia 9 May 2014

34 ANNUAL REPORT 2013 BALANCE SHEET AS AT 31 DECEMBER 2013

2013 2012 KHR’000 KHR’000

ASSETS Cash on hand 74,503 175,321 Deposits and placements with National Bank 3,446,749 184,215 of Cambodia Deposits and placements with banks 518,727 3,356,299 Loans to customers 25,151,945 20,260,650 Other assets 1,484,487 683,626 Property and equipment 327,085 210,486 Intangible assets 40,658 4,250

TOTAL ASSETS 31,044,154 24,874,847

LIABILITIES AND EQUITY Liabilities Deposits from customers 3,465,695 5,579,922 Borrowings 19,331,771 13,160,474 Other liabilities 1,276,771 556,394 4VSZMWMSRJSVMRGSQIXE\ 60,908 42,203

Total liabilities 24,135,145 19,338,993

Equity Share capital 4,834,050 3,599,900 Share premium 549,956 784,437 Legal reserves 49,455 30,781 Retained earnings 1,475,548 1,120,736

Total equity 6,909,009 5,535,854

TOTAL LIABILITIES AND EQUITY 31,044,154 24,874,847

ANNUAL REPORT 2013 35 INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2013

2013 2012 KHR’000 KHR’000

Interest income 9,795,614 6,580,689

-RXIVIWXI\TIRWI (1,621,718) (884,317)

Net interest income 8,173,896 5,696,372

Other operating income 992,933 734,781

'SQQMWWMSRI\TIRWIW (40) (1,241)

3XLIVSTIVEXMRKI\TIRWIW (8,978,619) (6,249,914)

Allowance for bad and doubtful (51,327) (5,092) loans and advances

4VS½XJVSQSTIVEXMSR 136,843 174,906

Grant income 411,871 57,684

4VS½XFIJSVIMRGSQIXE\ 548,714 232,590

-RGSQIXE\I\TIRWI (175,228) (82,800)

2IXTVS½XJSVXLI]IEV 373,486 149,790

36 ANNUAL REPORT 2013 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2013 2013 2012 KHR’000 KHR’000

'EWL¾S[WJVSQSTIVEXMRKEGXMZMXMIW Net cash used in operating activities (4,352,109) (3,322,680) 'EWL¾S[WJVSQMRZIWXMRKEGXMZMXMIW

Purchase of property and equipment (260,836) (113,956) Purchase of intangible assets (48,938) (1,998)

Proceeds from disposal of property and equipment 5,036 -

Net cash used in investing activities (304,738) (115,954)

'EWL¾S[WJVSQ½RERGMRKEGXMZMXMIW

Proceeds from borrowings 11,395,688 6,963,791

Repayments of borrowings (5,224,391) (2,780,717)

2IXGEWLKIRIVEXIHJVSQ½RERGMRKEGXMZMXMIW 6,171,297 4,183,074

Net increase in cash and cash equivalents 1,514,450 744,440

Cash and cash equivalents at the beginning of

the year 2,283,827 2,039,387

Cash and cash equivalents at the end of

the year 3,798,277 2,783,827

ANNUAL REPORT 2013 37 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2013 rnfr olglrsre --1,7 1,7)- (18,674) 18,674 6,909,009 784,437 - - 1,687,150 1,475,548 - 49,455 - (30,781) 5,535,854 - 549,956 5,535,854 - 30,781 1,120,736 4,834,050 - 1,120,736 30,781 2,914,477 - 784,437 30,781 784,437 as at 31 December 2013 Balance - 1,001,727 Transfers to legal reserves - - 784,437 2IXTVS½XJSVXLI]IEV 3,599,900 - capital of share premium to Conversion 1,687,150 3,599,900 to share capital of amounts due to shareholders Conversion - 2013 as at 1 January Balance as at 31 December 2012 Balance 2IXTVS½XJSVXLI]IEV 1,912,750 Transfers to legal reserves to share premium of amounts due to shareholders Conversion to share capital of amounts due to shareholders Conversion 2012 as at 1 January Balance H’0 H’0 H’0 H’0 KHR’000 KHR’000 KHR’000 KHR’000 KHR’000 3,8 2441--- 999,669 - - - - -234,481 - 234,481 999,669

aia rmu eevserig Total earnings premium reserves capital hr hr ea Retained Share Share Legal 7,8 373,486 373,486 - 149,790 - 149,790 - - - -

38 ANNUAL REPORT 2013 RATIONALE BEHIND OUR CHOSEN CORPORATE “PINK” COLOR AND LOGO

“ In color psychology, PINK is a sign of hope. It is a positive color inspiring warm and comforting feelings, a sense that everything is okay.”

In Chamroeun, PINK is the color of compassion, nurturing, and love. it also represents a GSPSVSJPSXYW¾S[IV[LMGL[EWWIPIGXIHEW'LEQVSIYR´WW]QFSP;LMPIXLIPSXYW¾S[IV represents a symbol of fortune in Buddhism, a religion followed by most Cambodian TISTPIMXEPWSW]QFSPM^IWWXVYKKPI%WGERFIWIIRPSXYWGVSTWKVS[MRQYHERHGERKVS[ as high as a river rises, but when the river goes down, this crop stands still, grows, and FPSWWSQW8LIREXYVISJXLIPSXYWGVSTERHMXW¾S[IVWVITVIWIRXXLIWXVYKKPMRKIJJSVXWXS achieve the enlightenment despite a challenging environment.

ANNUAL REPORT 2013 39 'LEQVSIYR´WPSKS[EWW]QFSPM^IHMREGMVGPIWLETIERH[VMXXIRMR[LMXIGSPSVSRETMROFEGOKVSYRH/LQIV word “Chamroeun” means “Prosperity” in English whereas “dot symbols” also has the same meaning as it starts with one then grows up to three dots then to nine.

: To build partners’ business foundations and to improve their living conditions Pink Color : To represent feeling of caring, tenderness, self-worth, love, and acceptance White Color : To represent the transparency and integrity of Chamroeun’s services Round Circle : To represent unity and solidarity Chamroeun : To ensure sustainability and growth of both Chamroeun and its partners

40 ANNUAL REPORT 2013 NETWORKS AND PARTNERSHIPS

FINANCIAL PARTNERS

NON-FINANCIAL PARTNERS

ANNUAL REPORT 2013 41 OFFICE ADDRESSES

PHNOM PENH BRANCHES

Head Office (855) 23 95 97 77 / 070 32 75 75 # 425, St. 271, Sangkat Tuol Tumpung 2, , Phnom Penh Main Branch - Chroy Changva Main Branch - Phsar Pochentong (855) 70 30 75 75 (855) 70 34 75 75 #18A, National Road 6A, Phum 3, Sangkat Chroychangva, #5C, Russie Blvd, Kbal Damrei Village, , Phnom Penh Sangkat Kakab, Khan Dangkoar, Phnom Penh Main Branch - Phsar Chbar Ampeou Main Branch - Phsar Chrang Chamres (855) 70 31 75 75 (855) 70 36 75 75 #599B, National Road 1, Daem Sreng Village, #04C, National Road 5, Spean Kposs Village, Sangkat Chbar Ampov II, Khan Meanchey, Phnom Penh Khan Russey Keo, Phnom Penh

PROVINCIAL BRANCHES

KANDAL PROVINCE Main Branch - Phsar Takmao District Branch - Kong Pisey (855) 70 35 75 75 (855) 70 96 75 75 #542, St. B21, Takmao Village, Takmao Commune, #42, National Road 3, Tram Kna Village, Tamkao District, Kandal Province. Snam Kroper Communce, , Kampong Speu Province. Main Branch - Ponhea Lueu (855) 70 47 75 75 District Branch - Samraong Torng #171, National Road 5, Prokda Village, Vihear Luong Commune, (855) 70 51 75 75 Ponhea Leu District, Kandal Province. # No, National Road 4 , Prey Kuy Village, Tropeang Korng Commune, , Main Branch - Kandal Steung Kampong Speu Province. (855) 70 37 75 75/ 70 48 75 75 #No, Street 104, Svay Ming Village, Bakou Commune, District Branch - Chbar Morn Kandal Steung districkt, Kandal Province. (855) 70 61 75 75 District Branch - Sa ang #60 , National Road 4, Group 4, Sam Nang Village, (855) 70 46 75 75 Sangkat Roka Thom, Chbar Mon City, #602, Praek Run Village, Praek Kuoy Commune, Kampong Speu Provincce. Sa Ang District , Kandal Province. SIEMREAP PROVINCE District Branch - Koh Thom Main Branch - Siem Reap (855) 70 97 75 75 (855) 70 38 75 75 #61, Group 4, Road 21, Praek Thmey Village, #No, Wat Bo Village, Sala Kamroeurk Commune, Praek Thmey Communce, Koh Thum District, Kandal Province. Siem Reap District, . District Branch - Kien Svay Main Branch - Puok (855) 70 43 75 75 (855) 70 52 75 75 National Road 1, Tuol Tnot Village, KorKi Commune, National Road 6A, Otaprak Village, Pouk Commune, , Kandal Province Pouk District, Siem Reap Province. District Branch - Leuk Daek District Branch - Sout Nikom (855) 70 27 75 75 (855) 70 60 75 75 #354, National Road1, Group 20, Kampong Chamlorng Village, #117, National Road 6, Group 6, Prek Tomlab Commune, Leuk Daek District, Kandal Province. Dam Daek Thmey Village, Dam Daek Communce, District Branch - Ang Snoul Sout Nikom District, Siem Reap Province (855) 29 75 75 KOMPONG CHNANG PROVINCE #32, National Road 4, Chong Bankol Village, Baek Chan Commune, Ang Snoul district, Kandal Province. District Branch - Kampong Chhnang (855) 69 37 81 81 District Branch - Praek Luong Kralach village, Kampong Chhnang commune, (855) 70 50 75 75 Kampong Chhnang district, . Prek Rorng Village, Praek Loung Commune, , Kandal Province District Branch - Kampong Tralach (855) 70 33 75 75 District Branch - PreakTameak #E038, Deum Popel, Thmor Et Commune, (855) 70 62 75 75 , Kampong Chhnang Province. #37, St.380, Praek Tameak Village, Praek Tameak Communce, Khach Kandal District, Kandal Province.

42 ANNUAL REPORT 2013

Main Branch - Battambang Main Branch - Kampong Thom (855) 70 39 75 75 (855) 70 42 75 75 #29, St. 3, Kamkor Village, Sangkat Svay Poar, #No, National Road 6A, Acha leak Village, Battam Bang City, Battam Bang Province. Stueng Saen City, Kampong Thom Province.

District Branch - Branch - Santuk (855) 70 26 75 75 (855) 70 54 75 75 #National Road 5 ,Kansay Banteay Village, Muong Commune, #9, National Road 6A ,Thun Morng Village, Muong Ruessi District, Battambang Province. Kampong Thmor Commune , , Kampong Thom Province. District Branch - Thma Koul (855) 70 40 75 75 TAKEO PROVINCE National Road 5, Kaksekam Village, Tapoung Communce, Main Branch - Takeo , Battambang Province. (855) 70 45 75 75 KAMPONG CHAM PROVINCE #198, St. 20, Tropeang Orng Villige, Sangkat Rokar Kroav, Doun Kaev City, Takeo Province. Main Branch - Kampong Cham (855) 70 40 75 75 District Branch - Tramkak #No, 15 Villages, Sangkat Kampong Cham, Kampong Cham Village, (855) 70 94 75 75 Kampong Cham Province. National Raod 3, Prey Romdeng Village, Ang Tasom Communce, , Takeo Province. District Branch - Prey Chhor (855) 70 56 75 75 National Road 7, Prey Tor Toeng Village, Chrey Veang Commune, , Kampong Cham Province. Main Branch - Kampot (855) 70 99 75 75 District Branch - Chhoeung Prey #42, National Road 3, Kampong Bay Khang Cheung Village, (855) 10 44 81 81 Sangkat Kampong Bay,Kampot City, Kampot Province. Tasen Village, So Tep communce, , Kampong Cham Province. District Branch - Branch - Suong (855) 70 93 75 75 (855) 93 22 81 81 National Road 3, Chrey Village, Sat Pong Communce , #199, Group 35, Cheung Lorng Village, Chhuk District , Kampot Province. Sangkat Suong, Suong City, Kampong Cham Province. PURSAT PROVINCE BANTEAY MEANCHEY PROVINCE Main Branch - Pursat (855) 70 68 75 75 Main Branch - Banteay Meanchey #255, National Road 5, Thnal BamBaek Village, (855) 70 41 75 75 Sangkat Rorleap, Pursat City, Pursat Province. # 55A, National Road 6, Sangkat Kampong Svay, Serei Saophoan City, Banteay Meanchey Province. KRATIE PROVINCE District Branch- Mongkol Borie Main Branch - Kratie (855) 69 38 81 81 (855) 69 44 81 81 Group 07, National Road 5, Kouksvay Village, Ruessiekrouk Commune, National Road 7, Ou Russei village, Mongkol Borei District, Banteay Meanchey Province. Ou Ruessei commune, Kratie district, Kratie province

ANNUAL REPORT 2013 43

HEAD OFFICE

#425, Street 271, Sangkat Toul Tum Poung II, Khan Chamkarmorn, Phnom Penh, Kingdom of Cambodia Tel: (+855) 23 959 777 | E-mail: [email protected] Website: www.chamroeun.com