Excellent service with a smile Provide financial …...Excellent service with a smile Provide...
Transcript of Excellent service with a smile Provide financial …...Excellent service with a smile Provide...
រួម���ើម�ីសហគមន៍រ�កច���ន
Excellent service with a smile
Provide financial services to the needs of customers
These are all our duties
My Duties
Annual Report រ�យ�រណ៍���ំ��ំ2012
Annaul Report 201201
LY HOUR Microfinance Institution Plc received a license from the National Bank of Cambodia in the financial service operations
LY HOUR Microfinance Institution Plc received a license from the National Bank of Cambodia in the financial service operations
Key Figure
I - Corporate Information
1-History of LY HOUR Microfinance Institution Plc
2-Vision and Mission
3-Chairman's Message
4-Cambodia Economic Review
II - Business Review
1-Board of Directors
2-Management Profile
3-Organizational Chart of Ly Hour
4-Operational Area
5-Service & Products
6-Risk Management
III - Financial Highlight
1-Financial Statements 2012
IV - General Information
1-Events of the Year
2-Address and Contact Detail
03
05
05
07
09
12
13
15
16
17
19
21
53
54
Content
Number of borrowers
Operating provinces
Operating districts
Operating villages
% Of woman borrowers
Total staff
Total assets
Loan portfolio
Equity
Solvency ratio
Net financial income
Borrowers per credit officer
Average loan portfolio per credit officer
64
01
09
53
45%
36
KHR 19,221,364 Thousand
KHR 3,451,802 Thousand
KHR 19,203,343 Thousand
402.58%
KHR 160,176 Thousand
3
KHR 172,590 Thousand
Key Figure
Vision
Be a leading microfinance institution in providing financial services in Cambodia.
Mission
To provide an opportunity to Cambodian people to start up and expand their
businesses to improve the standard of living through obtaining the appropriate
microfinance services.
History of Ly Hour Microfinance Institution Plc.
Ly Hour Microfinance Institution is a licensed microfinance institution from the National Bank of
Cambodia to provide financial services. The institution is set up to assist the overall people who
could not get access to financial resources to support and improve their business.
Ly Hour Microfinance Institution Plc. established in late 2012 and received the MFI license
number MF37 from the National Bank of Cambodia on the 2nd October 2012. It is recognized as
legal and qualified microfinance institution to offer credit facilities to their customers. The busi-
ness put into operation and inaugurated officially on the 9th October 2012 presided by Lok
Chumteav OUK MALY, Deputy Governor, the representative of H.E CHEA CHANTO, Governor of
the National Bank of Cambodia.
In the near future, the institution will expand their business operations to other potential provinces
in order to ease the customers as well as respond to their needs.
Annual Report 201205 Annual Report 2012 06
Ly Hour Group is the parent company with number of its subsidiary companies. Ly Hour Money
Exchange established in 1986, where was operated in a small shop and provided only money
exchange service as a family business. With a significant growth, Ly Hour Group has some
subsidiary companies such as Ly Hour Exchange & Jewelry Co., Ltd.; I.K V.M Distribution Co.,
Ltd.; Ly Hour Development Co., Ltd.; Borey Vimean Phnom Penh and lately Ly Hour Microfinance
Institution Plc. have been established in October 2012.
Ly Hour Microfinance Institution Plc. has publicly served its customers with their competitive
financial products and services immediately after obtaining license from the National Bank of
Cambodia on the 2nd October, 2012. This institution is ranked as the 4th among the largest insti-
tutions in term of registered capital of up to USD5 millions (Five Millions US Dollars)".
The Institution’s Board of Directors also adopted the strategic planning for its first phase aiming
to be the top 10 microfinance institutions among the nearly 40 MFIs in the industry by the year
end, 2013. To respond to this, 4 prioritized plans are also introduced and implemented as follows:
Remarks of the Chairman
Oknha Ly Hour
Chairman of the Board of Directors
Oknha Ly HourChairman of the Board of Directors
1. Building a strong and capable management team who has long time management and experi-
ence in microfinance/banking industry to ensure good governance and sustainable operations in
a long term run.
2.Expanding branch network/operations in 7 capital city/provinces in a short time period for
instance Phnom Penh, Battambang, Kampong Cham, Prey Veng, Kandal, Kampong Speu and
Takeo.
3.Growing quality lending portfolio carefully up to USD15 millions (Fifteen Millions US Dollars) by
the end of 2013.
4. Providing the best customer service through knowledgeable and professional staff with high
ethical and professional manner.
In order to cope with the earlier mention strategic plans and expected objectives, the institution
will recruit 100 staff approximately by the first semester of the year 2013. This is a part that the
institution has contributed to the overall development of the country by offering a long term
professional career with a good pay to hundreds of our people.
Finally, I would like to express my deepest and profound thanks to the National Bank of Cambodia
in particular and other relevant stakeholders who have always given us a strong support and
motivation. At the same time, I also would like to express my sincere thanks to all managements
and staff of Ly Hour microfinance institution who have been working very hard without thinking of
tiredness and have always committed to perform their roles with high integrity, profession, and
accountability.
Annual Report 201207 Annual Report 2012 08
Several years, Cambodia’s economy has experienced strong growth, despite the world economy
not yet recovered. The following is a summary from a speech of the Prime Minister of the King-
dom of Cambodia at the 2013 Cambodia Outlook Conference.
“… Between 2008–2012, Cambodia achieved steady growth at a rate of 5.6% per year. If exclud-
ing the 2009 growth, which was the year of the economic crisis, the growth during the same
period would stand at 6.8% per annum. Growth for 2012 has recently been revised upward from
7% to around 7.7% of GDP.
Growing public and private investment; rebound in industry especially garment exports; contin-
ued robust growth in the service sector mainly in tourism and real estate activities combined with
strong growth in the financial sector; and good performances in the industry and agriculture sec-
tors predominantly rice production and exports have supported this 2012’s performance.
The future outlook for Cambodia is positive, with projected annual growth of more than 7% over
the medium term. In addition, GDP per capita increased from USD 760 in 2008 to nearly USD
1,000 in 2012, with a projection of USD 1,080 in 2013. As a result, the poverty rate dropped to
20% in 2012, and to an estimated 19% in 2013.
Inflation has been constrained. In particular, the 19.7% inflation in 2008 caused by the soaring oil
and food price crisis dropped to 1% in 2009, followed by a slight increase to 2.5% in 2012. Infla-
tion has been kept under control to ensure promising conditions for economic activities and the
stability of people’s livelihoods. Inflation is projected to be suppressed at 4% in 2013.
The exchange rate, especially against the US dollar, has been generally stable during the last few
years, with a slight appreciation of the Riel. In particular, the USD/Riel exchange rate was 4,065
in 2008 and largely remained stable at 4,050 in 2012. Within the Cambodian context, apart from
helping strengthening macro-economic stability, this stable exchange rate also helps to balance
the interests of both USD and Riel holders and increase public confidence in the Riel. Cambodia’s
international reserve has gradually increased, reaching USD 3.2 billion which is equivalent to five
months of imports.
The trade deficit has been significantly reduced, declining from 15.3% of GDP in 2008 to 9.1% in
2012, enabling Cambodia to maintain a reasonable balance of trade. Increased production
capacity for domestic supply and exports, along with enhanced export capacity and competitive-
ness have contributed to the decline of the trade deficit.
Despite the impact of the global financial crisis and several natural disasters, state revenue rose
by an average of 13.6% per annum between 2008–2012, of which tax, customs and excise and
non-tax revenues increased by 15.3%, 11.8% and 11.6% respectively.
Cambodia Economic Review
Annual Report 201209 Annual Report 2012 10
Public expenditure policy and administration have also been improved and strengthened, result-
ing in better planning of expenditure requirements and better linkages to policy priorities as well
as more effective and efficient use of state budget. The public expenditure policy gives priority to
education, health, agriculture and rural development sectors as well as to the improvement and
expansion of physical infrastructure such as roads, bridges, ports, electricity, clean water,
schools, hospitals and irrigation systems. In particular, public expenditure increased by 17% per
annum, of which current expenditure and capital expenditure increased by 17.6% and 16.8%
respectively.
Public investment financed by state revenue increased from 711 billion riel in 2008 to 1,327 billion
riel in 2012, with much focus directed to physical infrastructure for underpinning growth and social
development and protection of national sovereignty and integrity, while financing by external
sources increased from 1,926 billion riel in 2008 to 2,860 billion riel in 2012.
Public investment on physical infrastructure totalled 9,852 billion riel between 2008–2012, of
which transport, irrigation and electricity absorbed 6,821 billion riel, 2,251 billion riel and 780
billion riel respectively. Between 2008–2012, public investment on transport increased from 850
to 1,851billion riel; irrigation investment increased from 201 to 650 billion riel, and electricity
investment increased from 128 to 327 billion riel.
From 1993 to 2012, the condition of government debt significantly improved. In particular, debt to
GDP ratio was 73%, debt to export ratio was 643%, while debt to state revenue was 1,766%.
However, in 2012, these ratios dropped significantly. Debt to GDP decreased to 31%, debt to
export ratio decreased to 72%, and debt to state revenue dropped to 227%.
These few years, Cambodia’s strong economic growth has somewhat cushioned our economy
from most of the impact. Throughout the crisis, Cambodian government has maintained a prudent
and flexible macroeconomic policy while strengthening financial safety nets.”
Source: Prime Minister’s speech at the 2013 Cambodia Outlook Conference
Director of Board
Oknha Ly HourChairman, Board of Directors
Oknha Ly SophearkMember, Board of Director
Mrs. Liao XiMember, Board of Director
Mr. Tsai Ching ChengMember, Board of Director
Annual Report 201211 Annual Report 2012 12
Mr. Uth Soeurng, CEO
Management
Mr. Uth Soeurng, 34yrs, from Kampong Thom Province, In term of education,
he has a Master’s Degree in Accounting & Finance obtained in 2002 from a
French School in Vietnam (CVFG) and is currently pursuing qualifications as a
Chartered Financial Analyst (CFA). He spent more than 10 years’ working in
several senior management functions in commercial baking and microfinance
in Hattha Kasekar, PRASAC and ANZ banking group in Cambodia. He has proven skills in Leasing,
commercial & corporate lending, portfolio management, credit & risk management, finance and
also IT & MIS. During his time with ANZ, he won the 1st Corporate Sale Award in 2009 economic
crisis, and held a Credit Approval Discretion limit (CAD) of up to USD 2 million while exercising his
commercial CAD as Credit Risk Manager in late 2010. Recently, he also led successfully the ATM
& Mobile Banking project at Hattha Kasekar Limit using the newest technology.
Mr. Mao Polo, DCEO&CROJoined Ly Hour Microfinance Institution Plc. as Deputy Chief Executive Officer
and Chief Risk Officer in 2012. He was born in 1977. He was a scholarship
student from National University of Management (former: Faculty of Business).
He graduated his Bachelor of Business Administration (BBA), majored in
Accounting and Finance in 1999. Then in 2004, he obtained a Master of
Business Administration (MBA), majored in General Management from Preston University (College
of Business Administration and Management), recognized by the Legislature of the Wyoming State,
United State of America. He started his first career with Food for the Hungry International as
Finance Assistant after graduation and then quickly promoted to Country Accountant from 2000 to
2005. He moved to CDRI – Cambodia’s Leading Independent Development Policy Research Insti-
tute as Senior Accountant till 2008. He had been working for ANZ Royal Bank (Cambodia) Limited
from 2008 to 2012 as Credit Risk Manager where he held the Credit Approval Discretion – CAD to
approve loan request for a single customer up to USD 2 Million and then promoted to Head of Retail
Lending where he looked after the whole retail lending portfolio including SME & Home Loans.
Annual Report 201213
Mrs. Sok Sophorn, DCEO&COOBorn in July, 4th, 1967. She obtained a Bachelor Degree in Accounting from
National University of Management in 1991.She have attended numerous
courses on management. She had more than 20 years’ experience with bank-
ing industry like Foreign Trade Bank, Cambodian Commercial Bank, Credit
Agricole Indosuez, Maybank and ANZ Royal Bank. While she was working with
ANZ Royal Bank, she had received the First Place Award of Customer Service. She has joined with
Ly Hour Microfinance Institution plc since Jan 2012 as Head of Operation. Based on her seniority
and capability, she then promoted to be Deputy Chief Executive Officer and Chief Operation Officer
in March 2013 where she has a broader and majored responsibility in all strategic and technical
aspect related to the general management, operations, information technology, human resource,
administration and marketing of the institution.
Mr. KIM Bunnavuth, Head of Internal AuditKim has completed his Bachelor of Business Administrative in Accounting at
National University of Management in 1995 and Master of Business Adminis-
tration in Finance at Charles Sturt University, Australia in 2005.
More than 17 years, Mr. Kim earned more experience from big 4 audit firms
(KPMG & PWC) as Senior Auditor, with manufacturing as an Internal AuditManager and many different multinational companies/firms as Finance Manager/Financial Controller.
Mr. Kim has possessed a strong background in Accounting, Finance and Auditing as demonstrated
through his past leadership roles in multinational companies and solid experience with professional
accounting firms. Mr. Kim has participated successfully in the development of policies and proce-
dures for companies he served under which resulted in better internal controls and increased
growth.
Annual Report 2012 14
Org
aniz
atio
nal C
hart
of L
y H
our
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irman
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D
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Annual Report 201215
Operational Area
Note: This map used for Ly Hour Branch only.
Oddar Meanchey
Banteay Meanchey
Poipet
Siem Reap
Stung Treng
Preah Vihear
Ratanakiri
MondulkiriKratie
Kampong Cham
Kampong Chhang
Phnom Penh
Kampong Speu Prey VengKandal
Svay RiengTakeo
Shihanuk Village
Koh Kong
Pursat
Kampong Thom
Battam Bong
Pailin
Kep
Kampot
Office
Note
Operating Area
Target Area
Non
Annual Report 2012 16
A. Service
Ly Hour Microfinance Institution is strongly focusing on the customer services, maintaining a
closed and harmony relationship with the customers, friendly serving with smile, acting profes-
sionally and ethically to ensure a high standard of best customer services.
B. Products
As can be seen that the need of the customers in term of funding source to support and expand
their business operations as well as to improve their living standard is increasing nowadays in the
rural area, Ly Hour microfinance has decided to offer credit facilities to respond to the actual need
of our potential customers. The facility is very flexible depending on the customer’s cash flow, with
a long term maturity, and varieties of repayment arrangement. There are two types of credit facil-
ity, one is small loan and another one is medium loan which can be chosen as either Khmer Riel
currency or US Dollar currency.
2. Medium Loan
- Currency: Khmer Riel or US Dollar
- Loan Term: Long-term repayment arrangement
- Credit Limit: Depending on customer’s need
- Interest: Competitive offer
1. Small Loan
- Currency: Khmer Riel or US Dollar
- Loan Term: Long-term repayment arrangement
- Credit Limit: Start from USD 500 or equivalent
- Interest: Competitive offer
Products & Service
Annual Report 201217
Risk management plays a very significant part within Ly Hour Microfinance Institution in which the
management team is focusing and prioritizing because it’s a catalyst that helps bring the whole
institution towards success as well as maintain its long term sustainability. Therefore, in order to
ensure that there is an effective and efficient risk management, Ly Hour uses a key principle to
early prevent any unexpected risk from happening. To ensure the best practice of risk manage-
ment in place, Ly Hour has determined the scope of work/responsibility and segregated it into 3
core components such as (1) business function, (2) risk function and (3) audit function. It means
that each individual function is independently performing their duties and also accountable to
what they have done. Currently, Ly Hour is working on an establishment of some risk manage-
ment policy included operational risk, financial risk as well as credit risk.
In addition to this, to ensure that there is a systematic approach to manage risk and assist the
management team to find proper solutions in a timely manner, Ly Hour also introduces 4 critical
processes to be followed within the institution such as identify/categorize, assess, manage and
monitor. Ideally, Risk Department plays an active part in identifying any possible risk involving
with staff’s implementation as well as processes and procedures of other relevant departments.
After risk is identified then assessment will also be made to understand its possibility to incur as
well as any impacts that may have. Practically, it requires all the risk included its risk level to be
registered into a risk registered tool for a tracking purpose. Ly Hour, more importantly, develops
an appropriated approach/strategy to resolve and/or reduce such an impact for instance mitigate,
reduce, transfer or transform the risk. Last but not least, Ly Hour will strictly monitor all the risk to
ensure that they have been properly managed and resolved in an effective way and to some
extent new action plans should be taken into account should the risk is still at a high attention.
Risk Management
Annual Report 201219
Directors report 22
Balance sheet 25
Income statement 26
Statement of changes in equity 27
Cash flow statement 28
Notes to the financial statements 29
APPENDIX: Notes on compliance with the Central Bank’s Prakas 47
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2012
Annual Report 201221
DIRECTOR’S REPORT:
The Board of Directors (the directors) hereby submit their report together with the
unaudited financial statements of Ly Hour Microfinance Institution Plc. (Ly Hour) for the year
ended 31 December 2012.
PRINCIPLE ACTIVITIES:
The principle activity of the institution is to provide loan to customers through its head
office in Phnom Penh, and in a number of provincial and district branches in the Kingdom of Cam-
bodia. On 02 October 2012, the institution received its license from the National Bank of Cambo-
dia (”the Central Bank”) to provide the loans to customers.
FINANCIAL PERFORMANCE:
The financial performance for the year ended 31 December2012 is set out in the
income statement on page 26.
ASSETS:
Before preparing the Ly Hour Microfinance Institution’s financial statements, the
Directors took necessary steps to ensure that all assets that are unlikely to be realized to return
in the ordinary operating of the business at their values as shown in the accounting records of the
institution could be written off to the amount in which they may expect to be realized.
At the date of this report, the Directors are not aware of any circumstance which would
render the values attributed to the assets in the financial statements of the Institution mis-
leading in any material aspect.
VALUATION METHODS:
At the date of this report, the Directors are not aware of any circumstance which has
arisen that would render the existing method of valuation of those assets in the financial state-
ments of the institution misleading or inappropriate in any material aspect.
CONTINGENCY AND OTHER LIABILITIES:
At the date of this report, there is no:
(a) Charge on the assets of the institution that has arisen since the end of the year that
secures the liabilities of any person; or
Annual Report 2012 22
(b) Contingent liability in respect of the institution that has arisen since the end of the
year other than in the ordinary course of business.
CHANGE OF CIRCUMSTANCES:
At the date of this report, the Directors are not aware of any circumstance not other-
wise dealt in this report or the financial statements of the institution which would render any
amount stated in financial statements misleading in any material aspect.
UNUSUAL TRANSACTION:
In the opinion of the Directors, as of 31 December 2012, the financial performance of
the institution showed there was no items, transactions or events of a material and unusual nature
were materially affected.
THE BOARD OF DIRECTORS:
The members of the board of directors during the year and as at the date of this report
are:
- Oknha Ly Hour Chairman, Board of directors
- Oknha Ly Sopheark Member, Board of Director
- Mrs. Liao Xi Member, Board of Director
- Mr. Tsai Ching Cheng Member, Board of Director
RESPONSIBILITIES OF BOARD OF DIRECTORS TO THE FINANCIAL STATEMENTS
The Directors are responsible to ensure that the financial reports are properly and
fairly produced in all material aspects of the financial position and its financial performance and
cash flow statement of the institution at the year end of 31 December 2012. In preparing this
report, the Directors are required to:
1. Adopt appropriate accounting policies that are supported by reasonable, and
prudent judgment and estimate and then apply them consistently.
2. Comply with the disclosure requirements and the guideline issued by the National
Bank of Cambodia and Cambodia Accounting Standard or if any departure from such standards
in the interest of fair presentation ensures that this has been appropriately disclosed, explained
and quantified in the financial statements.
Annual Report 201223
3. Maintain adequate accounting records and the effective internal control systems.
4. Prepare the financial statements on going concern basis unless it is appropriated to
assumption that the institution will not able to operation its business in the foreseeable future.
5. Effective control and direct the institution and be involved in all main decisions
which will be effected to all material aspects of it operation and the result of institution and to
ensure that all material effected was properly shown in financial statements.
APPROVAL OF FINANCIAL STATEMENTS:
The Directors approved on the financial statements together with the notes, present
fairly, in all material aspects of financial position as the date of 31 December 2012 and its financial
performance and statement of cash flow for the year-ended in accordance with the guidelines
issued by the National Bank of Cambodia and Cambodia Accounting Standard.
_________________
Oknha Ly Hour
Chairman, Board of Directors
Annual Report 2012 24
BALANCE SHEET
As of 31 December 2012
ASSET
Cash on hand
Balance with Central Bank
Balance at banks
Loans
Other assets
Property and equipment
Total assets
LIABILITY AND EQUITY
LIABILITIES
Income tax Liabilities
Other liabilities
Total liabilities
EQUITY
Share capital
Retained earnings
Total equity
Total liabilities and equities
Notes
3
4
5
6
7
8
9
10
11
KHR’000
(Unaudited)
13,449,939
1,001,386
957,542
3,451,802
92,733
267,962
19,221,364
542
17,479
18.021
19,975,000
(771,657)
19,203,343
19,221,364
USD
(Unaudited)
3,366,693
250,660
239,685
864,031
23,212
67,074
4,811,355
136
4,375
4,511
5,000,000
(193,156)
4,806,844
4,811,355
2012
Annual Report 201225
INCOME STATEMENT
For the end of 31 December 2012
Interest income
Interest expense
Net interest income
Other income
Personnel Expenses
Depreciation and Amortization Expenses
General and Administrative Expenses
Operating profit
Reversal of provision/(provision) for
bad and doubtful loans
Grant income
Profit before income tax
Income tax expense
Net profit
Notes
12
13
14
15
16
9
KHR’000
(Unaudited)
116,334
-
116,334
43,842
(460,605)
(105,547)
(364,079)
(770,055)
-
-
(770,055)
(1,602)
(771,657)
USD
(Unaudited)
29,120
-
29,120
10,974
(115,295)
(26,420)
(91,134)
(192,755)
-
-
(192,755)
(401)
(193,156)
2012
Annual Report 2012 26
CASH FLOW STATEMENT
For the end of 31 December 2012
STAT
EMEN
T O
F C
HA
NG
ES IN
EQ
UIT
Y
For t
he e
nd o
f 31
Dec
embe
r 201
2
Bal
ance
as
of 0
1 A
ugus
t 201
2
Tran
sfer
to s
hare
cap
ital
Tran
sfer
to re
serv
es
Div
iden
d pa
id
Pro
fit fo
r the
yea
r
Bal
ance
as
of 3
1 D
ecem
ber 2
012
(una
udite
d)
US$
equ
ival
ent (
unau
dite
d)
Shar
e
Cap
ital
KH
R’0
00
-
19,9
75,0
00
- - -
19,9
75,0
00
5,00
0,00
0
Shar
e
Prem
ium
KH
R’0
00
- - - - -
Stat
utor
y
Res
erve
s
KH
R’0
00
- - - - -
Ret
aine
d
Earn
ings
KH
R’0
00
- - - -
(771
,675
)
(771
,675
)
(193
,156
)
Tota
l
KH
R’0
00
-
19,9
75,0
0 - -
(771
,657
)
19,2
03,3
43
4,80
6,84
4
Notes
15
6
7
10
9
8
11
3
Thousand Riels
(Unaudited)
(770,055)
105,547
(664,508)
(3,451,802)
(998,750)
(799,000)
(92,733)
17,479
(5,989,314)
(1.060)
(5,990,374)
(373,509)
(373,509)
19,975,000
19,975,000
-
-
-
13,611,117
USD
(Unaudited)
(192,755)
26,420
(166,335)
(864,031)
(250,000)
(200,000)
(23,212)
4,375
(1,499,203)
(265)
(1,499,468)
(93,494)
(93,494)
5,000,000
5,000,000
-
-
-
3,407,038
2012
Annual Report 201227 Annual Report 2012 28
Cash flow from operating activities
Profit before income tax
Adjustment:
Depreciation and amortization expenses
Operating profit before changing assets
and operating loans
Changing in assets and loans to Customers
Balance with Central Bank
Balance with other banks
Other assets
Other liabilities
Cash flow used in operation
Income tax paid
Net cash from operating activities
Cash flow from Investing activities
Purchase of property and equipment
Net cash used in investing activities
Cash from financing activities
Cash from share capital
Net cash used in financing activities
Net (decrease)/increase in cash and
cash equivalents
Cash and cash equivalent beginning of the year
Currency translation differences
Cash and cash equivalent at the end of the year
1. BACKGROUND INFORMATION
Ly Hour Microfinance Institution (Ly Hour) was established in 2012. It was registered
with the Ministry of Commerce as a private limited liabilities company under registered license
number Co.2046KH/2012 dated on August 6, 2012. On October 20, 2012, the institution received
its microfinance license (MFI) from the National Bank of Cambodia (Central Bank).
Primary activities of the institution are to provide the microfinance services to low
income people and medium enterprise and active economic in Cambodia through its Head Office
in Phnom Penh and Branch Offices in Province and other District Offices through the country-
wide.
The Institution was incorporated and registered in the Kingdom of Cambodia. The
institution’s head office is located at No. 314, Street Charles De Gaulle, Sangkat Orrusey2, Khan
7 Makara, Phnom Penh, Kingdom of Cambodia. The institution has 36 employees as of Decem-
ber 31, 2012.
2. SUMMARY OF SIGNIFICATION OF ACCOUNTING POLICIES
The principle accounting policies adopted in the preparation of the financial state-
ments are set out below:
2.1 Base of Preparation
The financial statements have been prepared in accordance with the Cambodia
Accounting Standard (CAS) and the guidelines of the National Bank of Cambodia. In applying
CAS, the institution applies the CFRS 7, the Financial Instrument Disclosure. The accounting
principles which were applied, may diverge from General Accepted Accounting Principle
(”GAAP”) adopted in other countries and jurisdictions. The disclosures of the financial statements
are not intended to show the financial position, performance and cash flow statement in accord-
ance with the jurisdictions other than of the Kingdom of Cambodia. Consequently, these financial
statements are addressed only to those who are informed about the accounting principles, proce-
dures and the implementing in the Kingdom of Cambodia only. The financial statements have
been prepared in US Dollars (USD) under the historical cost convention.
2.2 Currency Translation
A. Functional and presentation currency
Items included in the financial statements of the institution are measured using the
primary economic environment which it is operational (The Functional Currency). The financial
statements are presented in US Dollars, which it is the institution’s functional and presentation
currency.
The translation of US Dollars (USD) to Khmer Riels (KHR) is used for preparation of
the financial statements and this translation is based on the average official exchange rate regu-
lated by the National Bank of Cambodia as at this report date which was USD1 equal to KHR
3,995 (31 December 2012).
B. Transactions and balances
Transactions in currencies other that US Dollars, the functional and presentation
currency, are translated into KHR at the exchange rate prevailing at the date of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation at the year-end exchange rate of monetary assets and liabilities denominated in
currencies other USD are recongnized in the income statement.
2.3 Basis of aggregation
The financial statements included the financial reports of head office and other
branches after elimination of all balance and inter-branches transactions.
2.4 Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents comprise
cash on hand, the non-restricted balances with the Central Bank, and balances with other banks,
with original maturities of three months or less from the date of acquisition.
2.5 Loans to customers
Loans to customers are stated in the balance sheet at the amount of the principal
outstanding less any amounts written off and provision for bad and doubtful loans.
Loans are written off when there is no realistic prospect of recovery. Recovery of previ-
ously written-off loans is recognized in the income statement.
2.6 Provision bad and doubtful loans.
The institution follows the mandatory credit classification and provisioning as required
NOTES TO THE FINANCIAL STATEMENTS
For the year end of 31 December 2012
Annual Report 201229 Annual Report 2012 30
by the Prakas No. B7-02-186 dated 13 September 2002. This Prakas requires microfinance insti-
tutions to classify their loan portfolio into the following four classes based on a number of days
past due of principal and/or interest repayment and ensure that the minimum mandatory level of
specific provisioning is provided depending on loan classification, regardless of the assets
(except cash) pledged as collateral, as follows:
Loan classification
Short term loan (less than 1 year) Number of days past due Provision
Standard Less than 30days 0%
Substandard Equal to or more than 30 days 10%
Doubtful Equal to or more than 60 days 30%
Loss Equal to or more than 90 days 100%
Long term loan (more than 1 year)
Standard Less than 30 days 0%
Substandard Equal to or more than 30 days 10%
Doubtful Equal to or more than 180 days 30%
Loss Equal to or more than 360 days 100%
2.7 Property and equipment
Property and equipment are stated at historical cost less accumulated depreciation
and accumulated impairment. Historical cost includes expenditure that is directly attributable to
the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognized as a
separate asset, as appropriate, only when it is possible that future economic benefits associated
with the item will flow to the Institution and the cost of the item can be measured reliably. All other
repair and maintenance are charged to the income statement during the financial year in which
they are incurred.
Depreciation of property and equipment is charged to the income statement on a
declining balance as the follows.
Office improvement 20%
Office equipment 25%
Information technology (“IT”) equipment 50%
Furniture and Fitting 25%
Motor vehicle 25%
2.8 Provision:
Provisions are recognized when the Institution has a legally or present 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 number of this outflow will be
required in settlement is determined by considering the class of obligations as a whole. A provi-
sion is recognized even if the likelihood of an outflow with respect to any one item included in the
same class of obligations may be small.
2.9 Interest income:
Interest income on loans to customers, balance with central bank and balance with
other banks are recognized on accrual basis. Where a loan becomes non-performing loan, the
interest income will be recorded in suspended until it is received actual cash payment.
2.10 Fees and commission incomes
The institution recognized the fees and commission incomes from a diverse range of
services serves to its customers. This fee income is recognized when the loan disburse to cus-
tomers.
2.11 Leases:
Leases in which a significant portion of risks and rewards of ownership of assets are
retained by the lessor are classified as operating leases. Payments made under operating leases
are charged to the income statement on a straight-line basis over the period of the leases.
2.12 Annual Income tax
The annual income tax in the year is recognized by calculating base on the law on
taxation which was already adopted or partly adopted as the reporting date in Cambodia where
the institution operates and generates the taxable income.
Taxes are calculated based on the current interpretations of the law on taxation and
regulations. However, these regulations are subjected to periodic variation and the ultimate deter-
mination of tax payment will be imposed by the tax authorities after their final tax inspection. While
there is any differentiation of the final tax assessment from the original records, those variances
will impact the income tax.Annual Report 201231 Annual Report 2012 32
2.13 Rounding of amounts
The presenting amounts in the financial statements have been rounded off to the
nearest thousand KHR and US Dollar amounts, respectively.
3.Cash on hand
For Statement of cash flow, cash and cash equivalents comprised:
4. Balance with Central Bank
A.Statutory capital deposit
In compliance with Prakas No. B7-07-209 dated 13 September 2007 on the Licensing
of Microfinance Institutions, the institution is required to maintain a statutory capital deposit with
the Central Bank of 10% of registered capital. This deposit is refundable when institution voluntar-
ily liquidate its business.
B. Interest:
The current accounts are non-interest bearing. The statutory capital deposit account in US$
which earns interest of 0.12% per annum.
5. Balance with Banks
Current accounts are non-interest bearing. Annual interest rates on fixed accounts and
Saving accounts are summarized as below:
2012
Fixed accounts 2.07%
Saving accounts 1.00%
6. Loans to customers
Cash on hand
Balance with Central Bank
Balance with banks
KHR’000
Unaudited
13,449,939
2,636
158,542
13,611,117
USD
Unaudited
3,366,693
660
39,685
3,407,038
USD
Unaudited
3,365,679
1,014
3,366,693
Head office
Branches
KHR’000
Unaudited
13,445,889
4,050
13,449,939
2012
2012
Current accounts
Fixed accounts
Saving accounts
KHR’000
Unaudited
1,998
799,000
156,544
957,542
USD
Unaudited
500
200,000
39,185
239,685
2012
Individual loans
Specific provision
Provision for bad and doubtful loans
KHR’000
Unaudited
77,731
187,022
1,151,443
2,035,606
3,451,802
USD
Unaudited
19,457
46.814
288,221
509,539
864,031
2012
Current account
Statutory capital deposit
KHR’000
Unaudited
2,636
998,750
1,001,386
USD
Unaudited
660
250,000
250,660
2012
Annual Report 201233 Annual Report 2012 34
a. Analysis by loan maturity
b. Analysis by currency
C. Analysis by economic sector
d. Analysis by relationship
e. Analysis by location
f. Analysis by security on performing and non-performing loans
g. Analysis by interest rate
The annual interest which was put as the operation in the year as follows:
2012
Loan in US$ 14.40%-30.00%
7. Other assets
Less than 1 month
From 1 month and less than 3 months
From 3 months and less than 12 months
From 1 year and less than 5 years
KHR’000
Unaudited
77,731
187,022
1,151,443
2,035,606
3,451,802
USD
Unaudited
19,457
46.814
288,221
509,539
864,031
2012
Phnom Penh
KHR’000
Unaudited
3,451,802
3,451,802
USD
Unaudited
864,031
864,031
2012
Accrued interest receivable
Prepaid expenses
KHR’000
Unaudited
31,950
60,783
92,733
USD
Unaudited
7,997
15,215
23,212
2012
Standard loans:
Secured
Unsecured
Substandard loans:
Secured
Unsecured
Doubtful loans:
Secured
Unsecured
Loss loans:
Secured
Unsecured
KHR’000
Unaudited
3,451,802
-
-
-
-
-
-
-
3,451,802
USD
Unaudited
864,031
-
-
-
-
-
-
-
864,031
2012
US Dollars
KHR’000
Unaudited
3,451,802
3,451,802
USD
Unaudited
864,031
864,031
2012
Agriculture
Trading and commerce
Construction
Services
Transportation
Others
KHR’000
Unaudited
13,982
1,179,524
167,280
349,196
-
1,741,820
3,451,802
USD
Unaudited
3,500
295,250
41,873
87,408
-
436,000
864,031
2012
External customers
Staff loans
KHR’000
Unaudited
3,451,802
-
3,451,802
USD
Unaudited
864,031
-
864,031
2012
Annual Report 201235 Annual Report 2012 36
by the Prakas No. B7-02-186 dated 13 September 2002. This Prakas requires microfinance insti-
tutions to classify their loan portfolio into the following four classes based on a number of days
past due of principal and/or interest repayment and ensure that the minimum mandatory level of
specific provisioning is provided depending on loan classification, regardless of the assets
(except cash) pledged as collateral, as follows:
Loan classification
Short term loan (less than 1 year) Number of days past due Provision
Standard Less than 30days 0%
Substandard Equal to or more than 30 days 10%
Doubtful Equal to or more than 60 days 30%
Loss Equal to or more than 90 days 100%
Long term loan (more than 1 year)
Standard Less than 30 days 0%
Substandard Equal to or more than 30 days 10%
Doubtful Equal to or more than 180 days 30%
Loss Equal to or more than 360 days 100%
2.7 Property and equipment
Property and equipment are stated at historical cost less accumulated depreciation
and accumulated impairment. Historical cost includes expenditure that is directly attributable to
the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognized as a
separate asset, as appropriate, only when it is possible that future economic benefits associated
with the item will flow to the Institution and the cost of the item can be measured reliably. All other
repair and maintenance are charged to the income statement during the financial year in which
they are incurred.
Depreciation of property and equipment is charged to the income statement on a
declining balance as the follows.
Office improvement 20%
Office equipment 25%
Information technology (“IT”) equipment 50%
Furniture and Fitting 25%
Motor vehicle 25%
8. P
rope
rty
and
equi
pmen
t
As
of 0
1 A
ugus
t 201
2
Cos
t
Acc
umul
atio
n de
prec
iatio
n
Net
boo
k va
lue
The
year
end
of 3
1 D
ecem
ber 2
012
Ope
ning
net
boo
k va
lue
Add
ition
s
Rec
lass
ifica
tion
Dis
posa
l
Dep
reci
atio
n ch
arge
s
Net
boo
k va
lue
at th
e en
d of
per
iod
As
of 3
1 D
ecem
ber 2
012
Cos
t
Acc
umul
atio
n de
prec
iatio
n
Net
boo
k va
lue
US
$ eq
uiva
lent
(una
udite
d)
Leas
e
Impr
ovem
ent
KH
R’0
00
- - - - - -
25,2
05
- -
(5,0
41)
20,1
64
25,2
05
(5,0
41)
20,1
64
5,04
7
Offi
ce
Equ
ipm
ent
KH
R’0
00
- - - - - -
150,
590 - -
(37,
647)
112,
943
150,
590
(37,
647)
112,
943
28,2
71
Equ
ipm
ent IT
KH
R’0
00
- - - - - -
53,7
18
- -
(26,
859)
26,8
59
53,7
18
(26,
859)
26,8
59
6,72
3
Furn
iture
Fitti
ng
KH
R’0
00
- - - - - -
20,8
30
- -
(5,2
07)
15,6
23
20,8
30
(5,2
07)
15,6
23
3,91
1
Mot
or
Vehi
cles
KH
R’0
00
- - - - - -
123,
166 - -
(30,
793)
92,3
73
123,
166
(30,
793)
92,3
73
23,1
22
TOTA
L
KH
R’0
00
- - - - - -
373,
509 - -
(105
,547
)
267,
962
373,
509
(105
,547
)
267,
962
67,0
74
KHR’000
Unaudited
1,602
-
1,602
9.Income tax expenses
1. Provision for income tax
2. The reconciliation of income tax expense computed at the statutory tax
rate to the income tax expense shown in the income statement is as follows:
In accordance with the law on taxation of Cambodia, the institution has an obliga-
tion to pay in the form of either tax on profitat the rate of 20% of its annual taxable profits or
minimum tax rate 1% of its turnover whichever is higher.
3. Other tax matters.
The institution’s monthly tax returns are subject to periodic examination by the
General Department of Taxation. Some areas of tax laws and regulations may be opened to
different interpretation; therefore, the tax amounts which reported in the financial statements
could be changed at a later date upon the final determination by the General Department of
Taxation.
Current tax (minimum tax)
Deferred tax
USD
Unaudited
401
-
401
2012
KHR’000
Unaudited
-
1,602
(1,060)
-
542
Beginning balance
Current income tax (minimum tax)
Income tax paid
Currency Translation difference
USD
Unaudited
-
401
(265)
-
136
2012
KHR’000
Unaudited
(770,055)
1,602
1,602
Profit before income tax
Minimum tax1%
USD
Unaudited
(192,755)
401
401
2012
Annual Report 201237 Annual Report 2012 38
10. Other liabilities
11. Share capital
The Shareholders and number of shares are shown as below table:
The total number of authorized shares at the end of the year 2012 was 5,000,000
shares with value at USD1 per share and all issued shares are fully paid.
12. Interest income
13. Other operating incomes
14. Personnel expenses
15. Depreciation and amortization expenses
KHR’000
Unaudited
1,978
15,501
17,479
Accumulated on other operating expenses
Withholding tax
USD
Unaudited
495
3,880
4,375
2012 KHR’000
Unaudited
109,563
6,771
116,334
Individual Loans
Balance with Central Bank and banks
USD
Unaudited
27,425
1,695
29,120
2012
KHR’000
Unaudited
43,825
17
43,842
Fee and commission income
Penalty income
USD
Unaudited
10,970
4
10,974
2012
KHR’000
Unaudited
384,768
57,508
1,988
12,246
4,095
460,605
Salary and wages
Incentive
Employee training
Other employee benefits
Health Insurance
USD
Unaudited
96,312
14,395
498
3,065
1,025
115,295
2012
KHR’000
Unaudited
105,547
-
105,547
Tangible depreciation
Intangible amortization
USD
Unaudited
26,420
-
26,420
2012
KHR’000
Unaudited
5,193,500
4,993,750
4,993,750
4,794,000
19,975,000
Lok Oknha Ly Hour
Lok Oknha Ly Sopheark
Mrs. Liao Xi
Mr. Tsai Ching Cheng
USD
Unaudited
1,300,000
1,250,000
1,250,000
1,200,000
5,000,000
Ownership
26%
25%
25%
24%
100%
Shares
1,300,000
1,250,000
1,250,000
1,200,000
5,000,000
Lok Oknha Ly Hour
Lok Oknha Ly Sopheark
Mrs. Liao Xi
Mr. Tsai Ching Cheng
2012
Annual Report 201239 Annual Report 2012 40
16. General and administration expenses
17. Other leases
Operating lease commitments
These operating leases mainly relate to the office rental, which is renewable upon
having mutual agreement. Where the Institution is the lessee, the future minimum lease pay-
ments under non-cancellable operating leases are as follows:
18. Financial risk management
The Institution’s activities are exposed to a variety of financial risks: credit risk, market
risk including currency risk, interest rate risk and pricing risk. Taking risks is a core of the financial
business, and the operational risks are an inevitable consequence of being in business.
18.1 Credit risk
The Institution takes on exposure to credit risk, which is the risk that counter parties
will cause a financial loss by failing to discharge an obligation. Credit risk is the most important
risk for the Institution business. Credit exposure arises principally in lending activities that lead to
loans to customers. There is also credit risk in off-balance sheet financial instruments, such as
loan contracts. The credit risk management is carried out by credit committee. The credit policies
are included documents the lending policy, collateral policy, credit approval and processes and
procedures implemented to ensure compliance with Central Bank policies guidelines.
A. Credit risk measurement
The Institution assesses the probability of default of individual counterparties by
focusing on borrowers forecast profit and cash flow. The credit committee is responsible for
approving loans to customers.
B. Risk limit control and mitigation policies
The Institution operates and provides loans to individuals or small-medium enter-
prises within the Kingdom of Cambodia. The Institution manages limits and controls the concen-
tration of credit risk whenever it is identified.
The Institution 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 Institution implements guidelines on the acceptability of specific
classes of collateral or credit risk mitigation. The principal collateral types secured for loans to
customers are:
- Mortgages over residential properties (land, building and other properties); and
- Charges over business assets such as land and buildings.
KHR’000
Unaudited
24,008
89,404
8,044
801
59,167
11,778
10,359
18,481
9,192
14,403
40
18,387
123
99,892
364,079
Motor vehicle expenses
Rental and utilities
Business trip expense
Professional cost
Office supplies
Marketing and advertising cost
Security
Communication
Printing
Repair and maintenance
Bank charge
Patent and license fee
Loss on exchange rate
Other costs
USD
Unaudited
6,010
22,379
2,014
201
14,810
2,948
2,593
4,626
2,301
3,605
10
4,603
31
25,003
91,134
2012
KHR’000
Unaudited
119,850
359,550
479,400
No later than1 year
Later than 1 year and no later than 5 years
USD
Unaudited
30,000
90,000
120,000
2012
Annual Report 201241 Annual Report 2012 42
C. Impairment and provisioning policies
The Central Bank requires microfinance institutions to classify their loan portfolio into
four classes and ensure that the minimum level of specific provision is made depending on the
classification concerned and regardless of the assets pledged as collateral as follows:
2012
Standard 0%
Substandard 10%
Doubtful 30%
Loss 100%
D. Maximum exposure to credit risk before collateral held or other credit
enhancements
The above table represents a worst case scenario for credit risk exposure to the Insti-
tution at 31 December 2012 without taking into account any collateral held or other credit
enhancements. For asset in balance sheet, the exposure set out above is based on net carrying
amounts.
Management is confident in its ability to continue to control and sustain minimal credit
risk exposure to the institution relating to its loans to customers on the following basis:
-100% of the loans in the portfolio are considered to be nor past due.
-The Institution has adopted a more stringent selection and collection process for
granting loans to customers.
E. Loans to customer
The customer’s loans are summarized as below:
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.
18.2 Market Risks
The Institution takes on exposure to market risk, which is the risk that the fair value or
future cash flow 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.
A. Risk on foreign exchange
The Institution operates in Cambodia and transacts by US$ all of this will not meet to
foreign exchange risk. Foreign exchange risk will arises from future commercial transactions and
recognized assets and liabilities denominated in a currency that is not the Institution’s functional
currency.
The table below is the summary of foreign exchange risk of institution as date of 31
December 2012. The table is included the financial instruments of the institution which follow the
carrying amount and currency of equivalent to thousand riels.
KHR’000
Unaudited
957,542
3,451.802
31,950
4,441,294
Credit exposure relating asset
on balance sheet:
Balance with banks
Loan to customers
Other assets
USD
Unaudited
239,685
864,031
7,997
1,111,713
2012
KHR’000
Unaudited
3,451,802
-
-
3,451,802
-
3,451,802
Loans to customers neither past due nor impaired
Loans to customers past due but nor impaired
Loans to customers individually impaired
Gross
Provision on bad and doubtful loans
Net loans to customers
USD
Unaudited
864,031
-
-
864,031
-
864,031
2012
Annual Report 201243 Annual Report 2012 44
C. Off balance sheet
Operating lease commitments
The institution is a tenant, all future expenditures of the minimum lease
cost under leasing agreement which are not eliminated shown in the financial note 17.
18.4 Capital management
The Institution objective of the capital management is broader concept than equity
which was shown in the balance sheet. The capital managements are as follows:
-To comply with the Central Bank required on capital requirement.
-To protect the ability of the institution in business going concern so the institution can
have the ability to continue provide the interest to shareholders and related parties and
-Maintain a solid capital reserved for supporting to the development of institution business.
The central bank required all licensed microfinance institutions to fulfill a). Minimum
capital requirement and b). To comply with the solvency ratio, liquidity ratio and other required
ratio.
The below table summarized regulatory capital: B. Pricing risk
The Institution 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 Institution does not currently have a policy to manage its price
risk.
18.3 Liquidity Risk
A. Liquidity risk management process:
The managements of institution monitor balance sheet liquidity and
manage the concentration and profile of debt maturities. The monitoring and reporting 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.
B. Funding process
The source of institution liquidity arising from the shareholder paid up capi-
tal. This source of liquidity is regularly monitored daily.
KHR’000
Unaudited
19,975,000
(771,657)
19,203,343
Tier 1 Capital
Share capital
Retained earning
USD
Unaudited
5,000,000
(193,156)
4,806,844
2012
KHR’000
57
57
95
95
(38)
As of 31 December 2012
Financial assets
Cash on hand
Balance with Central Bank
Balance with banks
Loans to customers
Other Assets
Total financial assets
Financial liabilities
Other liabilities
Total financial liabilities
Net financial assets
USD
13,449,882
1,001,386
957,542
3,451,802
31,950
18,892,562
1,978
1,978
18,890,584
TOTAL
13,449,939
1,001,386
957,542
3,451,802
31,950
18,892,619
2,073
2,073
18,890,546
Equivalent in KHR’000
Annual Report 201245 Annual Report 2012 46
1. Solvency Ratio
The licensed micro �nancial institution required to maintain the solvency ratio in more than
15% in any circumstances. As of 31 December 2012 the solvency ratio of the institution is 402.58%.
The calculation of own fund and solvency ratio is shown in detail in table 1.
2. Liquidity ratio
The licensed micro �nancial institution required to maintain the liquidity ratio in at least
100% in any circumstances. As of 31 December 2012 liquidity ratio of the institution is 100%.
The calculation of liquidity ratio in detail was shown in table 2.
3. Net opening position foreign currency
The licensed micro �nancial institution required in all time to maintain any net opening
position foreign currency or all net opening position of foreign currency in long or short term is not
more than 20% of direct net worth equity of micro�nance institution.
The calculation of net opening position foreign currency in detail of table 3
4. Classifications of credit, provision and liability ratio
The licensed Micro�nance Institution required classifying the rank of the credit in 4 classes
which is based on the borrower situation and regularly repayment and interest.
The classi�cation of credit, provision and the calculation of liability ratio are shown in table 4.
1. Subtotal A: Items to be added
-Capital or endowment
-Reserve other than revaluation reserve
-Premium related to capital (share premium)
-Provision for general banking risk and prior agreement from the
central bank
-Retained earning
-Net profit for the last financial year which unaudited
-Other items approved by Central Bank
2. Subtotal B: Items to be deducted
-For shareholders, directors, managers, and their next kin
*unpaid portion capital
*Advances, loans, security and the agreement of the persons
concerned above
-Holding of own share at their book value
-Accumulated loss
-Formation expenses
Losses determined by the dates other than the end of the annual
accounting period (Including provision on loan and doubtful debt
security)
3. Total C: Base net worth
4. Subtotal D: Item to be added
-Reserve revaluation with prior approval from the Central Bank
-Sub debt with prior approval from Central Bank could be included
up to 100% of base net worth
-Other Items with prior approval from central bank could be included
in the calculation of the net worth and shall not be more than the
base net worth
KHR’000
Unaudited
19,975,000
-
-
-
-
-
(771,657)
-
19,203,343
-
-
-
-
-
-
19,203,343
-
-
-
Appendix: Notes on the compliance with the Central Bank’s Prakas
As of the year end 31 December 2012.Table1 net worth and solvency ratio
As of 31 December 2012
Annual Report 201247 Annual Report 2012 48
Lable 2 Liquidity Ratio
As of 31 December 2012
1.Numerator (A)
Net worth
2.Denominator (B)
Assets (*)
-Cash
-Claims on the National Bank of Cambodia
-Assets collateralized by deposit
-Claims on sovereign rated AAA to AA-
-Claims on sovereign rated A+ to A-
-Claims on bank rated AAA to AA-
-Claims on sovereign rated BBB to BBB-
Claims on bank rated A+ to A-
-All other assets
1.Numerator: Liquid Asset
-Cash on hand
-Balance with Central bank
-Balance with banks
Subtotal (A)
Less:
-Amount owed to Central Bank
-Amount owed to banks
Subtotal (B)
Net liquidity (A-B)
Add:
-Portion of outstanding loan maturity less than 1 month
Liquid Assets (C)
2.Ddenominator: Adjusted amount of Deposit (D)
Category of deposits KHR’000 %
-Voluntary savings - 25%
Liquidity Ratio(C/D)
KHR’000
13,449,939
2,636
957,542
14,410,117
-
-
-
14,410,117
-
14,410,117
14,410,117
-
-
-
19,203,343
KHR’000
13,449,939
1,001,386
-
-
-
-
-
-
4,770,039
19,221,364
Weighing
0%
0%
0%
0%
20%
20%
50%
50%
100%
KHR’000
19,203,343
-
-
-
-
-
-
-
-
4,770,039
4,770,039
5. Subtotal E: Items to be deducted
-Equity participation in banking and microfinance institutions
-Other items
6. Total F: Net worth=C+D+E
Table1 net worth and solvency ratio
As of 31 December 2012
3.Solvency ratio (A/B)
402.58%
(*) the denominator ratio is the aggregate assets (Net amount after deduc-
tion the provision and depreciation) and off balance sheet number which was measured
by the risk limitation. According to the parkas of net worth calculation of microfinance
institution the denominator is excluded the items which was deducted when calculation
of the net worth.
Annual Report 201249 Annual Report 2012 50
Tabl
e 3
net o
peni
ng p
ositi
on fo
reig
n cu
rren
cy
As
of 3
1 D
ecem
ber 2
012
Cur
renc
ies
US
$
KH
R
Tota
l
Net
wor
th
Ass
ets
KH
R’0
00
19,2
21,3
07 57
19,2
21,3
64
Liab
ilitie
s
and
Cap
ital
KH
R’0
00
19,2
21,2
69 94
19,2
21,3
65
Net
Ope
n
Posi
tion(
NO
P)
KH
R’0
00 38
(38) -
19,2
03,3
43
NO
P/
Net
wor
th %
0.00
%
-0.0
0%
-
Lim
it %
20%
20%
Loan classification
1-Loans of 1 year or less
1-1 Standard
1-2 Substandard past due ≥ 30 days
1-3 Doubtful past due ≥60 days
1-4 Loss past due ≥90 days
Subtotal (1)
2-Loans more than 1 year
2-1 Standard
2-2 Substandard past due ≥ 30 days
2-3 Doubtful past due ≥180 days
2-4 Loss past due ≥360 days
Subtotal (2)
Total (1+2)
All loan past due >30days(A)
Loans outstanding(B)
Delinquency Ratio(A/B)
Amount
KHR’000
332,917
332,917
3,118,885
3,118,885
3,451,802
Rate
%
10%
30%
100%
10%
30%
100%
Specific Provision
KHR’000
-
-
-
-
-
-
-
-
-
-
3,451,802
-
Annual Report 201251 Annual Report 2012 52
Operational Area
Event of the Year
Grand Opening of the Head Office of Ly Hour Microfinance Institution Plc.
Head Office (Phnom Penh)No 314, St. Charles de Gaulle, Sangkat Orussey 2, Khan 7Makara, Phnom Penh.
Telៈ 023 980 888 / 023 999 368,
E-Mailៈ [email protected]
Websiteៈ www.lyhourmfi.com.kh
Oddar Meanchey
Banteay Meanchey
Poipet
Siem Reap
Stung Treng
Preah Vihear
Ratanakiri
MondulkiriKratie
Kampong Cham
Kampong Chhang
Phnom Penh
Kampong Speu Prey VengKandal
Svay RiengTakeo
Shihanuk Village
Koh Kong
Pursat
Kampong Thom
Battam Bang
Pailin
Kep
Kampot
Office
Note
Operating Area
Target Area
Non
Address:
Annual Report 201253 Annual Report 2012 54
The grand opening participated by vital honor guests such as the National Bank Offic-
ers, local authorities, business partners, customers, managements and staffs of Ly Hour Microfi-
nance Institution Plc.
Ly Hour Microfinance Institution Plc. established during the end of 2012 and received
its official microfinance licensed number M.H 37 from the National Bank of Cambodia on 2 Octo-
ber 2012 in full capacity of an official operation to provide loan service to its customers. The Insti-
tution was officially inaugurated on 09 October 2012 under the highly presidency of Her Excel-
lency Ouk Maly, Deputy Governor of the National Bank of Cambodia and highly representative
of H.E Chea Chanto, Governor of the National Bank of Cambodia.
Head office (Phnom Penh)No.314, St. Charles de Gaulle, Sangkat Orussey 2, Khan 7 Makara, Phnom Penh.Tel: 023 980 888 / 023 999 368E-mail: [email protected], Website: www.lyhourmfi.com.kh