prasac microfinance institution limited

Prasac Microfinance Institution LimitedFinancial statements in accordance withCambodian Accounting Standards andRegulations and Guidelines of the National Bank of Cambodia

as at 31 December 2018 and for the year then ended

Prasac Microfinance Institution Limited

CONTENTS

Pages

REPORT OF THE BOARD OF DIRECTORS 1 - 4

AUDITED FINANCIAL STATEMENTS

Independent auditor’s report 5 - 7

Balance sheet 8

Income statement 9

Statement of changes in equity 10

Statement of cash flows 11

Notes to the financial statements 12 - 50


BALANCE SHEETas at 31 December 2018

8

Notes 2018 2017USD KHR’000

equivalentUSD KHR’000

equivalent(Note 2.1) (Note 2.1)

ASSETSCash on hand 3 109,863,596 441,431,929 75,102,882 303,190,335Balances with the NationalBank of Cambodia 4 285,519,462 1,147,217,198 107,182,560 432,695,995Balances with other banks 5 7,356,281 29,557,537 10,287,623 41,531,134Loans to customers 6 1,936,725,039 7,781,761,207 1,528,863,817 6,172,023,229Other assets 7 24,781,015 99,570,118 20,993,129 84,749,262Property and equipment 8 4,958,112 19,921,694 4,799,471 19,375,464Intangible assets 9 1,592,753 6,399,682 1,799,265 7,263,633Deferred tax assets 14.2 8,132,528 32,676,498 5,240,425 21,155,597

TOTAL ASSETS 2,378,928,786 9,558,535,863 1,754,269,172 7,081,984,649

LIABILITIES ANDSHAREHOLDERS’ EQUITY

LIABILITIESDeposits from banks andother financial institutions 10 53,986,218 216,916,624 41,805,083 168,767,120Deposits from customers 11 1,237,292,967 4,971,443,141 873,307,762 3,525,543,435Borrowings 12 621,386,452 2,496,730,764 476,681,777 1,924,364,334Subordinated debts 13 69,453,307 279,063,388 64,716,264 261,259,558Income tax payable 14 20,538,620 82,524,175 15,323,182 61,859,686Provision for employeebenefits 15 1,266,404 5,088,411 - -Other liabilities 16 67,763,967 272,275,620 53,835,507 217,333,942

Total liabilities 2,071,687,935 8,324,042,123 1,525,669,575 6,159,128,075

SHAREHOLDERS’ EQUITYShare capital 17 110,000,000 441,980,000 110,000,000 444,070,000Reserves 17 2,976,091 11,957,934 2,800,230 11,304,529Retained earnings 17 194,264,760 780,555,806 115,799,367 467,482,045

Total shareholders’ equity 307,240,851 1,234,493,740 228,599,597 922,856,574

TOTAL LIABILITIES ANDSHAREHOLDERS’ EQUITY 2,378,928,786 9,558,535,863 1,754,269,172 7,081,984,649

The attached notes 1 to 31 form part of these financial statements.


INCOME STATEMENTfor the year ended 31 December 2018

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Operating incomeInterest income 18 279,243,493 1,122,000,355 230,799,149 931,736,165Interest expense 19 (120,182,278) (482,892,393) (92,408,365) (373,052,570)

Net interest income 159,061,215 639,107,962 138,390,784 558,683,595Net fees and commission income 20 9,251,770 37,173,612 1,797,911 7,258,167Other income 21 7,318,550 29,405,934 1,861,880 7,516,410Net foreign exchange gain (70,408) (282,899) 714,348 2,883,823

Total operating income 175,561,127 705,404,609 142,764,923 576,341,994Grant income 1,410,727 5,668,301 193,291 780,317Personnel expenses 22 (45,094,394) (181,189,275) (38,683,311) (156,164,527)General and administrativeexpenses 23 (16,955,733) (68,128,135) (14,628,031) (59,053,361)Provision for losses on loans tocustomers 6 (13,402,271) (53,850,325) (15,013,105) (60,607,905)Depreciation and amortization 24 (2,468,482) (9,918,361) (2,685,565) (10,841,626)

Profit before income tax 99,050,974 397,986,814 71,948,202 290,454,891

Income tax expense 14.1 (20,409,720) (82,006,255) (14,438,214) (58,287,069)

Net profit for the year 78,641,254 315,980,559 57,509,988 232,167,822



STATEMENT OF CHANGES IN EQUITYfor the year ended 31 December 2018

10

Sharecapital Reserves

Retainedearnings Total

USD USD USD USD

Balance as at 1 January 2018 110,000,000 2,800,230 115,799,367 228,599,597Net profit for the year - - 78,641,254 78,641,254Transfer to reserves - 175,861 (175,861) -

Balance as at 31 December 2018 110,000,000 2,976,091 194,264,760 307,240,851

KHR’000 equivalent (Note 2.1) 441,980,000 11,957,934 780,555,806 1,234,493,740

Balance as at 1 January 2017 110,000,000 2,565,749 58,523,860 171,089,609Net profit for the year - - 57,509,988 57,509,988Transfer to reserves - 234,481 (234,481) -

Balance as at 31 December 2017 110,000,000 2,800,230 115,799,367 228,599,597

KHR’000 equivalent (Note 2.1) 444,070,000 11,304,529 467,482,045 922,856,574



STATEMENT OF CASH FLOWSfor the year ended 31 December 2018

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equivalent(Note 2.1)

USD KHR’000equivalent(Note 2.1)

As reclassified – Note 31

OPERATING ACTIVITIESNet cash generated from(used in) operatingactivities 25 34,698,193 139,412,951 (160,538,937) (648,095,692)

INVESTING ACTIVITIESPurchase of property andequipment (2,386,620) (9,589,439) (1,437,254) (5,802,194)Acquisition of intangibleassets (99,340) (399,148) (16,525) (66,711)Proceeds from disposal ofproperty and equipment 140,913 566,189 57,474 232,023

Net cash used ininvesting activities (2,345,047) (9,422,398) (1,396,305) (5,636,882)

FINANCING ACTIVITIESProceeds from borrowings 283,433,178 1,138,834,509 272,521,840 1,100,170,668Repayment of borrowings (138,658,127) (557,128,354) (149,677,709) (604,248,911)Proceeds fromsubordinated debt 15,000,000 60,270,000 10,000,000 40,370,000Repayment ofsubordinated debt (10,333,333) (41,519,332) (6,666,667) (26,913,335)

Net cash provided byfinancing activities 149,441,718 600,456,823 126,177,464 509,378,422Net increase in cash andcash equivalents 181,794,864 730,447,376 (35,757,778) (144,354,152)

Cash and cash equivalentsat beginning of year 109,200,777 440,843,536 144,958,555 585,197,688Foreign currency difference - (2,070,426) - -

Cash and cash equivalentsat end of year 3 290,995,641 1,169,220,486 109,200,777 440,843,536



NOTES TO THE FINANCIAL STATEMENTSas at 31 December 2018 and for the year then ended

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1. CORPORATE INFORMATION

Prasac Microfinance Institution Limited (“the Company”) is a licensed micro-finance institution(“MFI”) incorporated and registered in the Kingdom of Cambodia.

Establishment and operations

The Company was incorporated in Cambodia and registered with the Ministry of Commerceas a private limited liability company under registration number Co-6931/04P dated 12 August2004. The Company re-registered under registration number 00001157 on 19 September2011 with the latest renewal on 28 April 2016.

The National Bank of Cambodia (“NBC”) granted a microfinance license to the Companyeffective 14 December 2007. In addition, the Company received the license from NBC toconduct a deposit-taking business on 27 August 2010 and permission to conduct automatedteller machine and point-of-sale services on 1 December 2011.

The principal activity of the Company is to provide financial services to rural communities andmicro-enterprises of Cambodia through its head office in Phnom Penh and various branchesin Phnom Penh and provinces in Cambodia.

The registered office of the Company is at Building 212, Street 271, Sangkat Tuol Tumpung2, Khan Chamkarmon, Phnom Penh, Kingdom of Cambodia.

Employees

As at 31 December 2018, the Company had 7,600 employees (7,058 employees as at 31December 2017).

Approval of the financial statements

The financial statements were authorized for issue by the Board of Directors on 13 February2019.

2. ACCOUNTING POLICIES

2.1 Basis of preparation

The financial statements have been prepared based on the historical cost basis. TheCompany maintains records and prepares financial statements in Khmer Riel (“KHR”) andUnited States Dollar (“USD”). Management has determined the USD to be the Company’smeasurement and presentation currency as it reflects the economic substance of theunderlying events and circumstances of the Company.

The financial statements of the Company have been prepared in compliance with CambodianAccounting Standards (“CASs”) and relevant regulations and guidelines issued by the NBC.

Transactions in currencies other than USD are translated into USD at the exchange rate rulingat the date of the transaction. Monetary assets and liabilities denominated in currencies otherthan KHR at the balance sheet date are translated into USD at the rates of exchange rulingat that date. Exchange differences arising on translation are recognized in the incomestatement.


NOTES TO THE FINANCIAL STATEMENTS (continued)as at 31 December 2018 and for the year then ended

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2. ACCOUNTING POLICIES (continued)

2.1 Use of financial statements and basis of preparation (continued)

2.1.1 Fiscal year

The Company’s fiscal year starts on 1 January and ends on 31 December..

2.1.2 Presentation of financial statements

The accompanying financial statements, including their utilization, are not designed for thosewho are not informed about the Kingdom of Cambodia's accounting principles, proceduresand practices and furthermore are not intended to present the financial position and results ofoperations and cash flows in accordance with accounting principles and practices generallyaccepted in countries other than the Kingdom of Cambodia.

The accounting policies set out below have been consistently applied by the Company duringthe year.

2.1.3 Standards not yet adopted

On 24 March 2016, the National Accounting Council of Cambodia (“NAC”) announced thatCambodian International Financial Reporting Standards (“CIFRSs”) implementation isdeferred to 1 January 2019. During the transition period, banks and financial institutions,including insurance companies, shall prepare progress report regarding the implementationof CIFRSs and report annually to the NAC and other regulators.

The adoption of CIFRSs is expected to have a significant impact on the financial statementsof the Company.

2.2 Significant accounting judgments and estimates

In applying the Company’s accounting policies, management has used its judgment and madeestimates in determining the amounts recognized in the financial statements, as follows:

2.2.1 Estimated useful lives of property and equipment and intangible assets

The useful life of each item of property and equipment and intangible assets is estimatedbased on the period over which the asset is expected to be available for use. Such estimationis based on a collective assessment of similar businesses, internal technical evaluation andexperience with similar assets. The estimated useful life of each asset is reviewed periodicallyand updated if expectations differ from previous estimates due to physical wear and tear,technical or commercial obsolescence and legal or other limits on the use of the asset. It ispossible, however, that future results of operations could be materially affected by changes inthe amounts and timing of recorded expenses brought about by changes in the factorsmentioned above. A reduction in the estimated useful life of any item of property andequipment and intangible assets would increase the recorded operating expenses anddecrease the carrying value of these nonfinancial assets. There is no change in the estimateduseful lives of property and equipment and intangible assets during the year.

2.2.2 Operating leases

The Company has entered into property leases as a lessee for its office premises. TheCompany has determined that the lessor retained all the significant risks and rewards ofownership over this property based on the indicators of operating lease treatment. Indetermining whether or not there is an indication of operating lease treatment, the Companyconsiders the following factors: retention of ownership title to the leased property, and periodof lease contract relative to the estimated useful economic life of the leased property, bearerof executory costs, among others.



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2.2 Significant accounting judgments and estimates (continued)

2.2.3 Impairment losses on loans to customers

When preparing the financial statements, the quality of loans to customers is reviewed andassessed to determine their classification and level of impairment losses, as disclosed furtherin Note 2.3.7.1.

2.2.4 Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds itsrecoverable amount, which is the higher of its fair value less costs to sell and its value in use.The fair value less costs to sell calculation is based on available data from binding salestransactions in an arm’s length transaction of similar assets or observable market prices lessincremental costs for disposing of the asset. The value in use calculation is based on adiscounted cash flow model. The cash flows are derived from the budget and do not includerestructuring activities that the Company is not yet committed to or significant futureinvestments that will enhance the asset’s performance of the cash generating unit beingtested. The recoverable amount is most sensitive to the discount rate used for the discountedcash flow model as well as the expected future cash-inflows and the growth rate used forextrapolation purposes.

2.2.5 Recognition of deferred tax assets

Deferred tax assets are recognized for all unused tax losses and temporary differences to theextent that it is probable that future taxable profit will be available against which the lossescan be utilized. Significant management judgment is required to determine the amount ofdeferred tax assets that can be recognized, based upon the likely timing and level of futuretaxable income together with future tax planning strategies.

The Company recognized deferred tax assets as at 31 December 2018 amounting toUSD8.13 million equivalent to KHR32.66 billion (31 December 2017: USD5.24 millionequivalent to KHR21.15 billion) as disclosed in Note 14.

2.3 Summary of significant accounting policies

2.3.1 Foreign currency translation

The Company’s functional and presentation currency is USD.

The financial statements are translated into USD based on the closing exchange rate of KHR4,018 per USD1 ruling at the reporting date (31 December 2017: KHR 4,037), as announcedby the NBC. Such translation should not be construed as a representation that USD amountsrepresent, or have been or could be, converted into USD at that or any other rate. All valuesin KHR and USD are rounded to the nearest thousand (“KHR’000”) and dollar, respectively,except as otherwise indicated.

2.3.2 Offsetting financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the balancesheet if, and only if, there is a currently enforceable legal right to offset the recognizedamounts and there is an intention to settle on a net basis, or to realize the asset and settlethe liability simultaneously. This is not generally the case with master netting agreements,and the related assets and liabilities are presented gross in the balance sheet.

2.3.3 Operating leases

Payments made under operating leases are recognized in the income statement on a straight-line basis over the term of the lease.



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2.3 Summary of significant accounting policies (continued)

2.3.4 Cash and cash equivalents

For statement of cash flow purposes, cash and cash equivalents consist of cash and bankbalances, demand deposits, and short-term highly liquid investments with original maturitiesof three months or less when purchased, and that are readily convertible to known amountsof cash and subject to an insignificant risk of changes in value.

2.3.5 Balances with the National Bank of Cambodia

Capital guarantee deposit and reserve balances are maintained with the NBC in compliancewith the Cambodian Law on Banking and Financial Institutions determined at definedpercentages of minimum share capital and total deposits from customers, respectively. Thisaccount also includes current account carried at cost and interest-bearing term deposit.

2.3.6 Balances with other banks

Balances with other banks are carried at cost.

2.3.7 Loans to customers

Loans to customers are stated in the balance sheet at the amount of principal less anyamounts written off and allowance for losses on loans.

Loans are written off when there is no realistic prospect of recovery. Recoveries of loans tocustomers previously written off, or provided for, decrease the amount of the provision forlosses on loans to customers in the income statement.

Loans classified as substandard, doubtful or loss are considered non-performing.

Prior to 1 December 2017:

The Company follows the mandatory credit classification and provisioning as required by NBCPrakas No. B7-02-186, Loan Classification and Provisioning Applicable to Specialized Banksfor Rural Credit and Licensed Microfinance Institutions, dated 13 September 2002 (“the oldPrakas”). The Prakas requires licensed MFIs to classify their loan portfolio into four classesbased on number of days past due of principal and/or interest repayment. The mandatorylevel of specific provisioning is provided depending on the loan classification, regardless ofthe assets (except cash) pledged as collateral, as follows:

Classification No. of days past due Rate of provision

Loans (term of up to one year)· Standard Less than 30 days 0%· Substandard 30 days or more 10%· Doubtful 60 days or more 30%· Loss 90 days or more 100%

Loans (term of more than one year)· Standard Less than 30 days 0%· Substandard 30 days or more 10%· Doubtful 180 days or more 30%· Loss 360 days or more 100%

In addition to the above mandatory level of specific provisioning, the Company provides, as amatter of policy, an additional general allowance for bad and doubtful loans at a rate of 1% ofall outstanding loans.



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2.3. Summary of significant accounting policies (continued)

2.3.7 Loans to customers (continued)

2.3.7.1 Loan classification and allowance for losses on loans to customers

From 1 December 2017:

On 1 December 2017, the NBC issued Prakas No. B7-017-344 on Credit Risk Grading andProvision on Impairment and Circular No. B7-018-001 dated 16 February 2018 on theImplementation of Prakas on Credit Risk Grading and Provision on Impairment (“the newPrakas”), which require all banks and financial institutions to measure the impairment andprovide sufficient allowance for bad and doubtful loans based on the new credit risk gradingand provision as follows:

Classification No. of days past due Rate of provision

Short term loans (with original term of less than or equal one year):· Standard Less than or equal 14 days 1%· Special mention 15 days to 30 days 3%· Substandard 31 days to 60 days 20%· Doubtful 61 days to 90 days 50%· Loss more than 90 days 100%

Long term loans (with original term of more than one year)· Standard Less than 30 days 1%· Special mention 30 days to 89 days 3%· Substandard 90 days to 179 days 20%· Doubtful 180 days to 359 days 50%· Loss 360 days or more 100%

The regulatory provision applies to all on and off-balance sheet facilities of banks and financialinstitutions. The mandatory level of allowance required under the new Prakas did not resultin any material difference on the provision amount compared with the old Prakas.

Recoveries on loans previously written off and reversal of previous allowances are disclosedas other income in the income statement.

2.3.8 Property and equipment

Property and equipment are stated at cost less accumulated depreciation and impairmentlosses, if any. The cost of a property and equipment item comprises its purchase price andany directly attributable costs of bringing the asset to its working condition and location for itsintended use. Where an item of property and equipment comprises major components havingdifferent estimated useful lives, the components are accounted for as separate items ofproperty and equipment.

Subsequent expenditure relating to an item of property and equipment that has already beenrecognized is added to the carrying amount of the asset when it is probable that futureeconomic benefits, in excess of the originally assessed standard of performance of theexisting asset, will flow to the Company. All other subsequent expenditure is recognized asan expense in the period in which it is incurred.

Gain or loss arising from the retirement or disposal of an item of property and equipment isdetermined as the difference between the estimated net disposal proceeds and the carryingamount of the assets and is recognized in income statement on the date of retirement ordisposal.



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2.3.8 Property and equipment (continued)

Depreciation is calculated on a straight line basis over the estimated useful life of the assetas follows:

Office furniture 5 yearsVehicles 5 yearsMotorcycles 4 yearsComputer and peripherals 4 yearsLeasehold improvements· Office Lease period from 2 to 10 years· ATM Lease period from 2 to 5 yearsCommunication equipment 4 years

Work in progress is not depreciated until such time as the relevant assets are completed andput into operational use.

Fully depreciated assets are retained in the financial statements until they are no longer inuse or no further charge for depreciation is made in respect of these assets.

If there is any indication that there has been a significant change in depreciation oramortization rate, useful life or residual value of an asset, the depreciation of that asset isrevised prospectively to reflect the new expectations.

2.3.9 Intangible assets

Intangible assets include software which is stated at cost less accumulated amortization andaccumulated impairment losses, if any. It is amortized on a straight-line basis at the rate of10% per annum.

If there is an indication that there has been a significant change in amortization rate, usefullife or residual value of software, the amortization is revised prospectively to reflect the newexpectations. Work in progress is not amortized until such time as the relevant assets arecompleted and put into operational use.

2.3.10 Other assets

Other assets are carried at estimated realizable value. An estimate is made for doubtfulreceivables based on a review of outstanding amounts at the reporting date.

2.3.11 Deposits from banks and other financial institutions and deposits from customers

Deposits from banks and other financial institutions and deposits from customers are statedat placement value.

2.3.12 Borrowings

Borrowings are stated at the amount of the principal outstanding. Fees paid on theestablishment of borrowing facilities are capitalized and amortized over the term of theborrowings using straight-line method.

2.3.13 Subordinated debts

Subordinated debts are long-term debts that are subordinated to all other liabilities of theCompany. These are treated as part of the Company’s liabilities and included in theCompany’s net worth computation under the NBC’s guidelines. Foreign exchange differenceson subordinated debts are taken through the income statement.



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2.3.14 Employee benefits

From 1 May 2016, the Company calculates employee benefits in the form of severance payentitlement based on the rate applicable to an employee’s length of working service with theCompany, ranging as follows:

No. of working yearsLess than 5

yearsBetween 5to 10 years

Between 10to 15 years

More thanyears

Severance pay rate 5% 8% 10% 12%

On 9 June 2017, the Company changed its method of calculating employee benefits from theabove to applying a fixed rate of 5% of the employee’s monthly fixed salary effective 1 April2017.

This obligation will be paid to staff upon resignation or retirement. Employees are entitled tobenefits based on their length of service (after completion of probation period) of regularemployment, except termination due to serious offense. This obligation earns no interest.

The employee benefits allocation is maintained at savings accounts (non-interest bearing)under the name of each employee within the Company and withdrawal can only be madeupon resignation or retirement.

As at 31 December 2017, the Company has fully settled the balance of the provision foremployee benefits related to the above based on the computation determined on 9 June 2017,as agreed with the employees. In 2018, the Company adopted the relevant mandatoryprovision of the Ministry of Labour and Vocational Training’s Prakas 443 dated 21 September2018 on implementation of payment of seniority indemnity, in accruing for the Company’sseverance pay for the year 2018. The said Prakas requires retroactive seniority payment(equivalent to the Company’s severance payment prior to the release of the Prakas) equal tofifteen days per year of employees’ wages which shall be paid to them as follows:

· Equal to seven and half days shall be made in June next year

· Equal to seven and half days shall be made in December next year

The implementation of the new Prakas did not have significant impact in the Company’sprovision for employee benefits for the year ended 31 December 2018.

2.3.15 Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive)as a result of a past event, and it is probable that an outflow of resources embodying economicbenefits will be required to settle the obligation and a reliable estimate can be made on theamount of the obligation.



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2.3.16 Recognition of income or expense

Revenue is recognized to the extent that it is probable that the economic benefits will flow tothe Company and the revenue can be reliably measured. The following specific recognitioncriteria must also be met before revenue is recognized:

(i) Interest income or expense

Interest income from loans to customers, and balances with the NBC and other banks isrecognized on an accrual basis, except for loans to customers that have been classifiedas substandard, doubtful or loss. Interest accruing to these loans shall instead be creditedto an interest in suspense account. Subsequently, interest income from these loans isrecognized on a cash basis. Interest in suspense is presented net of accrued interestreceivable in ‘Other assets’.

Interest expense is recognized on an accrual basis.

(ii) Fee and commission income and expense

The Company earns fee and commission income from a diverse range of services itprovides to its customers, mainly from loan processing. Fee and commission income ispresented as part of net fees and commission income.

Fee income from loans are recognized as income over the period of loans.

Fee and commission expense is charged to the income statement when the expense isincurred. Fees on borrowings are amortized on a straight-line basis over the term of therelated borrowings.

(iii) Operating expenses are recognized on an accrual basis.

2.3.17 Grants

Grants received from third parties to subsidise the Company’s operating expenses arereleased to the income statement on a systematic and rational basis, matching the relatedcosts which they are intended to compensate.

2.3.18 Related parties

Parties are considered to be related if the Company has the ability, directly or indirectly, tocontrol the other party or exercise significant influence over the other party in making financialand operating decisions, or vice-versa, or where the Company and the party are subject tocommon control or significant influence. Related parties may be individuals or corporateentities and include close family members of any individual considered to be a related party.

Related parties, as defined in Article 49 and 50 of the Cambodian Law on Banking andFinancial Institutions, include the following:(a) any person holding directly or indirectly at least ten percent (10%) of the capital or voting

rights;(b) any company of which the Company directly or indirectly holds at least 10% of the capital

or voting rights;(c) any individual who participates in the administration, direction, management or internal

control; and,(d) the external auditors.



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2.3.19 Income tax

Current tax

Current tax assets and liabilities for the current and prior periods are measured at the amountsexpected to be recovered from or paid to the taxation authorities. The tax rates and tax lawsused to compute the amount are those that are enacted at the balance sheet date.

Deferred tax

Deferred tax is provided using the balance sheet liability method on temporary differences atthe balance sheet date between the tax base of assets and liabilities and their carrying amountfor financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, except where thedeferred tax liability arises from the initial recognition of an asset or liability in a transactionwhich at the time of the transaction affects neither the accounting profit nor taxable profit orloss.

Deferred tax assets are recognized for all deductible temporary differences to the extent thatit is probable that future taxable profits will be available against which these differences canbe utilized, except where the deferred tax arises from the initial recognition of an asset orliability in a transaction which at the time of the transaction affects neither the accounting profitnor taxable profit or loss.

The carrying amount of deferred tax assets is reviewed at each balance sheet date andreduced to the extent that it is no longer probable that sufficient taxable profits will be availableto allow all or part of the assets to be recovered. Unrecognized deferred income tax assetsare re-assessed at each balance sheet date and are recognized to the extent that it hasbecome probable that future taxable profit will allow the deferred tax assets to be recovered.

3. CASH ON HAND

2018 2017USD KHR’000



Branches 94,989,852 381,669,225 62,253,349 251,316,770Head office 14,873,744 59,762,704 12,849,533 51,873,565

109,863,596 441,431,929 75,102,882 303,190,335

Cash on hand by currency comprises the following:

2018 2017USD KHR’000



USD 80,918,700 325,131,337 55,689,214 224,817,357KHR 26,104,288 104,887,029 17,958,417 72,498,129THB 2,840,608 11,413,563 1,455,251 5,874,849

109,863,596 441,431,929 75,102,882 303,190,335



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3. CASH ON HAND (continued)

For purpose of preparing the statement of cash flows, cash and cash equivalents comprisethe following:

2018 2017USD KHR’000



Cash on hand 109,863,596 441,431,929 75,102,882 303,190,335Balances with the NBCCurrent accounts 36,309,363 145,891,021 13,901,924 56,122,068Term deposits (up to threemonths) 137,466,401 552,339,999 9,908,348 39,999,999Balances with other banksCurrent accounts 7,251,160 29,135,161 8,243,809 33,280,257Savings accounts 105,121 422,376 2,043,814 8,250,877

290,995,641 1,169,220,486 109,200,777 440,843,536

4. BALANCES WITH THE NATIONAL BANK OF CAMBODIA

2018 2017USD KHR’000



Current accounts 36,309,363 145,891,021 13,901,924 56,122,068Term deposits 137,615,953 552,940,899 10,057,431 40,601,850Capital guarantee 10,950,722 44,000,001 10,899,183 44,000,000Reserve requirement 100,643,424 404,385,277 72,324,022 291,972,077

285,519,462 1,147,217,198 107,182,560 432,695,995

Current accounts earn no interest.

Term deposits maturing up to three months earn annual interest at rates ranging from 0.30%to 2.75% during the year (2017: from 0.69% to 2.75%).

Under Prakas No. B7-07-163 dated 13 December 2007 on Licensing of Deposit-TakingMicrofinance Institutions, the Company is required to maintain a capital guarantee depositequivalent to 10% of registered capital with the NBC. This deposit is not available for use inthe Company’s day-to-day operations but is refundable when the Company voluntarily ceasesto operate the business in Cambodia. The capital guarantee deposit earns annual interest at3.00% during the year (2017: 3.00%).

Reserve requirement represents the minimum reserve requirement which is calculated at8.00% of the total deposits from customers as required by Prakas No. B7-07-163. The reserverequirement fluctuates depending on the level of deposits from customers and does not earninterest.



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5. BALANCES WITH OTHER BANKS

2018 2017USD KHR’000



Current accounts 7,251,160 29,135,161 8,243,809 33,280,257Savings accounts 105,121 422,376 2,043,814 8,250,877

7,356,281 29,557,537 10,287,623 41,531,134

Current accounts do not earn interest. Savings accounts earn annual interest at rates rangingfrom 0.00% to 0.75% during the year (2017: 0.015% to 0.75%). Term deposits earn annualinterest at 2.25%.

Balances with other banks by currency are as follows:

2018 2017USD KHR’000



USD 6,565,095 26,378,552 9,502,063 38,359,828KHR 782,867 3,145,559 779,940 3,148,618THB 8,319 33,426 5,620 22,688

7,356,281 29,557,537 10,287,623 41,531,134

6. LOANS TO CUSTOMERS

Loans to customers are categorized as follows:

2018 2017USD KHR’000



Individual loans 1,914,221,278 7,691,341,095 1,512,464,690 6,105,819,954Loans to small andmedium enterprises 36,484,222 146,593,604 24,918,202 100,594,781Staff loans 11,019,751 44,277,360 10,910,556 44,045,915Group loans 284,317 1,142,386 565,889 2,284,494

Gross loans to customers 1,962,009,568 7,883,354,445 1,548,859,337 6,252,745,144Allowance for losses onloans to customersGeneral (19,477,168) (78,259,262) (15,372,600) (62,059,186)Specific (5,807,361) (23,333,976) (4,622,920) (18,662,729)

Total allowance (25,284,529) (101,593,238) (19,995,520) (80,721,915)

Net loans to customers 1,936,725,039 7,781,761,207 1,528,863,817 6,172,023,229



23

6. LOANS TO CUSTOMERS (continued)

Movements of allowance for losses on loans to customers are as follows:

2018 2017USD KHR’000



At beginning of year 19,995,520 80,721,915 14,495,238 58,517,276Provision during the year 13,402,271 53,850,325 15,013,105 60,607,905Written off during the year (8,113,262) (32,599,087) (9,513,069) (38,404,260)Foreign exchange difference - 379,915 246 994

At end of year 25,284,529 101,593,238 19,995,520 80,721,915

Further analyses of loans to customers are set out below.

(a) By grading of loans to customers

2018 2017USD KHR’000



Standard loansSecured 772,954,344 3,105,730,554 603,253,860 2,435,335,834Unsecured 1,174,759,558 4,720,183,904 934,006,252 3,770,583,239Special mention loansSecured 795,586 3,196,666 599,594 2,420,561Unsecured 1,019,134 4,094,881 1,125,580 4,543,966Substandard loansSecured 1,814,879 7,292,184 895,202 3,613,930Unsecured 1,769,456 7,109,674 1,819,258 7,344,345Doubtful loansSecured 2,648,057 10,639,893 2,275,243 9,185,156Unsecured 5,073,064 20,383,571 3,987,389 16,097,089Loss loansSecured 220,749 886,969 272,080 1,098,387Unsecured 954,741 3,836,149 624,879 2,522,637

Total gross loans 1,962,009,568 7,883,354,445 1,548,859,337 6,252,745,144

(b) By maturity

2018 2017USD KHR’000



Within one month 54,481,278 218,905,775 47,686,482 192,510,328More than 1 monthto 3 months 108,854,214 437,376,232 95,567,776 385,807,112More than 3 monthsto 12 months 427,002,816 1,715,697,315 359,529,386 1,451,420,131More than 1 yearto 5 years 1,246,799,398 5,009,639,981 929,137,351 3,750,927,486More than 5 years 124,871,862 501,735,142 116,938,342 472,080,087

1,962,009,568 7,883,354,445 1,548,859,337 6,252,745,144



24

6. LOANS TO CUSTOMERS (continued)

(c) By residency, relationship, currency and industry sector

2018 2017USD KHR’000



ResidencyResidents 1,962,009,568 7,883,354,445 1,548,859,337 6,252,745,144

RelationshipExternal customers 1,950,989,817 7,839,077,085 1,537,948,781 6,208,699,229Staff loans 11,019,751 44,277,360 10,910,556 44,045,915

1,962,009,568 7,883,354,445 1,548,859,337 6,252,745,144

CurrencyUSD 1,750,593,002 7,033,882,682 1,393,944,447 5,627,353,733KHR 143,121,382 575,061,714 102,125,520 412,280,724THB 68,295,184 274,410,049 52,789,370 213,110,687

1,962,009,568 7,883,354,445 1,548,859,337 6,252,745,144

Industry sectorConsumption 887,511,675 3,566,021,910 640,881,424 2,587,238,309Trade and commerce 373,867,783 1,502,200,752 290,120,153 1,171,215,058Agriculture 321,090,405 1,290,141,247 330,165,808 1,332,879,367Services 258,875,393 1,040,161,329 192,003,001 775,116,115Transportation 109,507,226 440,000,034 85,747,127 346,161,152Construction 11,157,086 44,829,172 9,941,824 40,135,143

1,962,009,568 7,883,354,445 1,548,859,337 6,252,745,144

(d) By location

2018 2017USD KHR’000



Branches 1,954,226,985 7,852,084,027 1,542,521,323 6,227,158,581Head Office 7,782,583 31,270,418 6,338,014 25,586,563

1,962,009,568 7,883,354,445 1,548,859,337 6,252,745,144

(e) Annual interest rates

2018 2017

Group loans 18.0% 18.0% - 36.0% (before April)18.0% (after April)

Individual loans 0.0% - 18.0% 8.4% - 36.0% (before April)0.0% - 18.0% (after April)

Biogas loans 14.4% 14.4%Staff loan 10.0% 10.0%

Effective 1 April 2017, the annual interest rate charge of all new loans and restructuredloans is capped at 18% as required by Prakas B7-017-109 on interest rate ceiling onloans.



25

7. OTHER ASSETS

2018 2017USD KHR’000



Interest receivable 16,064,128 64,545,667 13,933,293 56,248,704Prepayments 8,410,537 33,793,538 6,704,089 27,064,407Accounts receivable 144,969 582,485 131,879 532,396Deposits 127,640 512,858 175,959 710,346Long-term investment 28,167 113,175 28,167 113,710Others 5,574 22,395 19,742 79,699

24,781,015 99,570,118 20,993,129 84,749,262



26

8. PROPERTY AND EQUIPMENT

Officefurniture Vehicles Motorcycles

Computer andperipherals

Leaseholdimprovements

Communicationequipment

Work inprogress Total

USD USD USD USD USD USD USD USD

CostAs at 1 January 2018 4,273,682 2,342,697 347,381 5,262,467 2,110,982 292,189 33,314 14,662,712Additions 201,578 644,069 - 519,925 36,620 44,330 940,098 2,386,620Disposals/write-offs (95,584) (243,007) (1,053) (69,581) (135,058) (36,066) - (580,349)Transfers 99,753 20,928 - 574,862 126,460 - (822,003) -

As at 31 December 2018 4,479,429 2,764,687 346,328 6,287,673 2,139,004 300,453 151,409 16,468,983

Accumulated depreciationAs at 1 January 2018 2,985,217 1,591,778 317,706 3,437,322 1,298,749 232,469 - 9,863,241Depreciation 551,501 394,865 24,827 859,820 294,134 38,042 2,163,189Disposals/write-offs and others (93,672) (186,409) (882) (65,078) (133,979) (35,539) - (515,559)

As at 31 December 2018 3,443,046 1,800,234 341,651 4,232,064 1,458,904 234,972 - 11,510,871

Net book value

As at 31 December 2018 1,036,383 964,453 4,677 2,055,609 680,100 65,481 151,409 4,958,112

KHR’000 equivalent (Note 2.1) 4,164,187 3,875,172 18,792 8,259,437 2,732,642 263,103 608,361 19,921,694



27

8. PROPERTY AND EQUIPMENT (continued)

Officefurniture Vehicles Motorcycles

Computerand

peripheralsLeasehold

improvementsCommunication

equipmentWork in

progress TotalUSD USD USD USD USD USD USD USD

CostAs at 1 January 2017 3,924,350 2,177,050 354,781 4,910,159 1,985,285 301,773 630,935 14,284,333Additions 416,339 272,300 - 399,097 308,953 848 39,717 1,437,254Disposals/write-offs (67,007) (106,653) (7,400) (46,789) (183,256) (10,432) - (421,537)Transfer to intangible assets - - - - - - (637,338) (637,338)

As at 31 December 2017 4,273,682 2,342,697 347,381 5,262,467 2,110,982 292,189 33,314 14,662,712

Accumulated depreciationAs at 1 January 2017 2,316,971 1,321,968 245,442 2,670,432 1,114,532 198,909 - 7,868,254Depreciation 733,818 376,462 77,786 811,835 352,716 40,538 - 2,393,155Disposals/write-offs and others (65,572) (106,652) (5,522) (44,945) (168,499) (6,978) - (398,168)

As at 31 December 2017 2,985,217 1,591,778 317,706 3,437,322 1,298,749 232,469 - 9,863,241

Net book value

As at 31 December 2017 1,288,465 750,919 29,675 1,825,145 812,233 59,720 33,314 4,799,471

KHR’000 equivalent (Note 2.1) 5,201,533 3,031,460 119,798 7,368,110 3,278,985 241,090 134,489 19,375,464



28

9. INTANGIBLE ASSETS

Computersoftware

Core bankingsystemlicense

Work inprogress Total

USD USD USD USD

31 December 2018CostAs at 1 January 2018 944,876 2,264,070 97,583 3,306,529Additions 7,700 29,980 91,640 129,320Transfer during the year - - (29,980) (29,980)

As at 31 December 2018 952,576 2,294,050 159,243 3,405,869

Accumulated amortizationAs at 1 January 2018 552,453 954,811 - 1,507,264Amortization and others 80,535 225,317 - 305,852

As at 31 December 2018 632,988 1,180,128 - 1,813,116

Net book valueAs at 31 December 2018 319,588 1,113,922 159,243 1,592,753

KHR’000 equivalent (Note 2.1) 1,284,105 4,475,739 639,838 6,399,682

31 December 2017CostAs at 1 January 2017 928,351 1,724,315 - 2,652,666Additions 16,525 - - 16,525Transfers from property andequipment - 539,755 97,583 637,338

As at 31 December 2017 944,876 2,264,070 97,583 3,306,529

Accumulated amortizationAs at 1 January 2017 431,220 783,634 - 1,214,854Amortization 121,233 171,177 - 292,410

As at 31 December 2017 552,453 954,811 - 1,507,264

Net book value

As at 31 December 2017 392,423 1,309,259 97,583 1,799,265

KHR’000 equivalent (Note 2.1) 1,584,211 5,285,479 393,943 7,263,633

10. DEPOSITS FROM BANKS AND OTHER FINANCIAL INSTITUTIONS

2018 2017USD KHR’000



Term deposits 52,106,844 209,365,299 40,726,532 164,413,010Savings deposits 1,879,374 7,551,325 1,078,551 4,354,110

53,986,218 216,916,624 41,805,083 168,767,120



29

10. DEPOSITS FROM BANKS AND OTHER FINANCIAL INSTITUTIONS (continued)

Interest rates are as follows:

2018 2017

Term depositsUSD 2.0% - 6.5% 3.0% - 6.0%KHR 2.0% - 6.5% 3.0% - 6.0%Savings depositsUSD 0.0% 0.0%KHR 0.0% 0.0%

11. DEPOSITS FROM CUSTOMERS

2018 2017USD KHR’000



Term deposits 1,148,713,212 4,615,529,685 799,772,104 3,228,679,984Savings deposits 88,579,755 355,913,456 73,535,658 296,863,451

1,237,292,967 4,971,443,141 873,307,762 3,525,543,435

Deposits from customers are further analysed as follows:

(a) By maturity

2018 2017USD KHR’000



Within 1 month 243,705,159 979,207,328 184,282,471 743,948,335More than 1 month to3 months 220,217,126 884,832,412 205,025,696 827,688,735More than 3 months to12 months 710,824,921 2,856,094,533 440,605,568 1,778,724,678More than 12 months 62,545,761 251,308,868 43,394,027 175,181,687

1,237,292,967 4,971,443,141 873,307,762 3,525,543,435

(b) By currency

2018 2017USD KHR’000



USD 1,124,957,623 4,520,079,729 751,918,101 3,035,493,374KHR 101,278,189 406,935,763 112,147,908 452,741,105THB 11,057,155 44,427,649 9,241,753 37,308,956

1,237,292,967 4,971,443,141 873,307,762 3,525,543,435



30

11. DEPOSITS FROM CUSTOMERS (continued)

(c) By relationship

2018 2017USD KHR’000



Non-related parties 1,231,706,435 4,948,996,455 868,804,346 3,507,363,145Related parties 5,586,532 22,446,686 4,503,416 18,180,290

1,237,292,967 4,971,443,141 873,307,762 3,525,543,435

(d) Range of annual interest rates per annum

2018 2017

Term depositsUSD 4.00% - 8.00% 4.00% - 7.75%KHR 4.00% - 8.00% 4.00% - 7.75%THB 4.00% - 8.00% 4.00% - 7.75%Savings depositsUSD 2.00% - 3.00% 2.00% - 3.00%KHR 2.00% - 3.00% 2.00% - 3.00%THB 2.00% - 3.00% 2.00% - 3.00%

12. BORROWINGS

All Company’s borrowings are unsecured.

Borrowings are further analysed as follows:

(a) By relationship

2018 2017USD KHR’000



Non-related parties 611,386,452 2,456,550,764 476,681,777 1,924,364,334Related parties 10,000,000 40,180,000 - -

621,386,452 2,496,730,764 476,681,777 1,924,364,334

(b) By currency

2018 2017USD KHR’000



USD 536,801,719 2,156,869,307 427,853,731 1,727,245,512KHR 42,864,111 172,227,998 8,494,055 34,290,500THB 41,720,622 167,633,459 40,333,991 162,828,322

621,386,452 2,496,730,764 476,681,777 1,924,364,334



31

12. BORROWINGS (continued)

(c) By maturity

2018 2017USD KHR’000



On demand to 3months 150,382,042 604,235,044 14,393,164 58,105,203More than 3 months to12 months 121,137,812 486,731,729 95,801,872 386,752,157More than 12 months 349,866,598 1,405,763,991 366,486,741 1,479,506,974

621,386,452 2,496,730,764 476,681,777 1,924,364,334

As at 31 December 2018, the Company had breached a covenant on outstandingborrowings of USD118,307,694 with respect to Interest Rate Risk ratio, which constitutedan event of default and a ground for the borrowings to be immediately due and payable.On 9 February 2019, upon negotiation, the Company obtained approval from the lendersto delete the interest rate risk ratio covenant. The outstanding borrowings were presentedas part of the on demand to 3 months category since the Company received the approvalafter the balance sheet date.

(d) Range of annual interest rates per annum by currency

2018 2017

USD 6.00%- 9.01% 6.00% - 9.01%KHR 6.50% - 8.50% 8.50% - 11.61%THB 8.60% - 11.86% 8.72% - 11.86%

13. SUBORDINATED DEBTS

2018 2017USD KHR’000



Subordinated debts (a) 54,500,000 218,980,998 49,833,334 201,177,168Trust fund (b) 14,953,307 60,082,390 14,882,930 60,082,390

69,453,307 279,063,388 64,716,264 261,259,558



32

13. SUBORDINATED DEBTS (continued)

(a) Subordinated debts

These are subordinated debts from foreign lenders who are non-related parties whichwere approved by the NBC and are repayable based on the agreed schedules stated ineach loan agreement. The amount is included as Tier 2 Capital for purpose of net worthcalculation.

(b) Trust fund

2018 2017USD KHR’000



The Royal Government ofCambodia 11,356,475 45,630,317 11,303,026 45,630,317CRDF 3,596,832 14,452,073 3,579,904 14,452,073

14,953,307 60,082,390 14,882,930 60,082,390

The Royal Government of Cambodia (“the RGC”)

This trust fund denominated in KHR represents subordinated debt transferred to RGC on31 December 2004.

The subordinated debt is considered as “Tier 2 Capital” in the context of Article 15 ofPrakas No. B7-00-06 on the Licensing of Microfinance Institutions dated 11 January 2000which was also approved by the NBC for inclusion in the calculation of net worth on 12December 2007.

Cambodia Rural Development Foundation (“CRDF”)

The share transfer fund of Cambodia Rural Development Foundation (“CRDF”) in 2007amounting to KHR10,982,902,272 together with the additional transfer from reserve madeon 31 December 2015 amounting to KHR3,469,170,728, totalling KHR14,452,073,000(equivalent to USD3,579,904) as at 31 December 2017, was recognized as subordinateddebt.

The full amount of the subordinated debt from the CRDF fund shall be included in thecalculation of the net worth as Tier 2 Capital in the context of the calculation of net worthand for all prudential ratio purposes, such as the capital adequacy ratio.

On 28 December 2016, PRASAC Financial Trust and the Company agreed to an annualinterest rate of 3% on the trust fund (both the RGC and CRDF) with a five-year term. Theinterest rate and the term of the trust fund shall be revisited and negotiated every fiveyears (before the end of the term).

14. INCOME TAX

The Company’s tax returns are subject to examination by the General Department of Taxation(“GDT”). Because the application of tax laws and regulations to many types of transactions issusceptible to varying interpretations, the amounts reported in the financial statements couldchange at a later date upon final determination by the GDT.



33

14. INCOME TAX (continued)

14.1 Income tax expense

Applicable tax rates

In accordance with Cambodian tax law, the Company has the obligation to pay tax on profit(“TOP”) at the rate of 20% of taxable income or minimum tax at 1% of turnover inclusive of alltaxes except value-added tax, whichever is higher.

Income tax expense comprises:

2018 2017USD KHR’000



Current tax 23,277,042 93,527,155 17,477,729 70,557,592Deferred tax credit (2,867,322) (11,520,900) (3,039,515) (12,270,523)

20,409,720 82,006,255 14,438,214 58,287,069

Movements of income tax payable follow:

2018 2017USD KHR’000



Balance at beginning of year 15,323,182 61,859,686 12,290,277 49,615,848Current tax 23,277,042 93,527,155 17,477,729 70,557,592Income tax paid (18,061,604) (72,571,525) (14,444,824) (58,313,754)Foreign exchange difference - (291,141) - -

Balance at end of year 20,538,620 82,524,175 15,323,182 61,859,686

The reconciliation of income tax expense shown in profit or loss is as follows:

2018 2017USD KHR’000



Profit before income tax 99,050,974 397,986,814 71,948,202 290,454,891

Income tax expense atapplicable tax rate of 20% 19,810,195 79,597,364 14,389,639 58,090,972Non-deductible expenses 599,525 2,408,891 48,575 196,097

Effective income tax 20,409,720 82,006,255 14,438,214 58,287,069



34

14. INCOME TAX (continued)

14.2 Deferred tax assets

Details of deferred income tax assets (liabilities) recognized during the year follow:

2018 2017USD KHR’000



Deferred tax asset itemsUnamortized loan fees 4,666,105 18,748,410 2,942,140 11,877,419Allowance for loan losses 3,089,145 12,412,185 2,232,899 9,014,214Unused annual leave 263,458 1,058,574 224,401 905,907Provision for employee benefits 253,281 1,017,683 - -Foreign exchange differences 7,127 28,637 - -

8,279,116 33,265,489 5,399,440 21,797,540Deferred tax liability itemsForeign exchange differences - - (2,257) (9,110)Property and equipment (146,588) (588,991) (156,758) (632,833)

(146,588) (588,991) (159,015) (641,943)

Deferred tax assets - net 8,132,528 32,676,498 5,240,425 21,155,597

15. PROVISION FOR EMPLOYEE BENEFITS

2018 2017USD KHR’000



Balance at beginning of year(Note 2.3.14) - - 4,678,751 18,888,118Additions during the year(Note 2.3.14) 1,347,560 5,414,496 1,204,084 4,860,887Payments during the year (81,156) (326,085) (5,882,835) (23,749,005)

Balance at end of year 1,266,404 5,088,411 - -

16. OTHER LIABILITIES

2018 2017USD KHR’000



Interest payable 41,391,064 166,309,295 30,888,903 124,698,501Unamortised loan fee 23,330,525 93,742,049 14,710,702 59,387,104Accruals and other payables 1,658,130 6,662,366 1,704,111 6,879,496Tax on salary 680,020 2,732,320 1,234,201 4,982,469Withholding tax payable 393,932 1,582,819 298,502 1,205,053Others 310,296 1,246,771 4,999,088 20,181,319

67,763,967 272,275,620 53,835,507 217,333,942



35

17. EQUITY

i. Share capital and retained earnings

All 110,000,000 ordinary shares are registered, issued, and paid-up with a par value ofKHR4,000 per share.

Details of shareholdings are as follows:

2018 2017USD KHR’000

equivalent% USD KHR’000

equivalent%

(Note 2.1) (Note 2.1)

LOLC 77,000,000 309,386,000 70 77,000,000 310,849,000 70BEA 23,100,000 92,815,800 21 23,100,000 93,254,700 21PSCo 9,900,000 39,778,200 9 9,900,000 39,966,300 9

110,000,000 441,980,000 100 110,000,000 444,070,000 100

Abbreviation:LOLC: LOLC INTERNATIONAL PRIVATE LIMITEDBEA: The Bank of East Asia, LimitedPSCo: PRASAC Staff Company Limited

In 2018, the Company applied for the conversion of USD 58 million retained earnings intoshare capital. On 31 December 2018 and January 2019, the Company obtained relevantapproval from the NBC and the MOC, respectively. The Company recorded the capitalizationof retained earnings in 2019.

ii. Reserves and retained earnings

Based on the loan agreement signed between Instituto De Crédito Oficial (“ICO”) of theKingdom of Spain and the Company, the Company shall undertake to establish and keep areserve fund for the capital strengthening by transferring its net profit of each year, an amountequivalent to a 3.5% of the outstanding principal of the loan. As at 31 December 2018, thereserves amounted to USD 2,976,091 (2017: USD 2,800,230). This reserve is non-distributable.

18. INTEREST INCOME

2018 2017USD KHR’000



Individual loans 278,477,942 1,118,924,371 229,995,686 928,492,584Balances with other banks 698,456 2,806,396 556,223 2,245,473Group loans 67,095 269,588 247,240 998,108

279,243,493 1,122,000,355 230,799,149 931,736,165



36

19. INTEREST EXPENSE

2018 2017USD KHR’000



Deposits from customers 70,931,169 285,001,436 53,999,990 217,997,960Borrowings 42,825,710 172,073,703 33,118,993 133,701,375Subordinated debts 5,561,089 22,344,456 4,899,417 19,778,946Deposits from banks andother financial institutions 864,310 3,472,798 389,965 1,574,289

120,182,278 482,892,393 92,408,365 373,052,570

20. NET FEES AND COMMISSION INCOME

2018 2017USD KHR’000



Fee income from loans 11,038,100 44,351,086 3,138,578 12,670,439Fees and commissionincome from localremittance services 907,988 3,648,296 889,788 3,592,074

Total fees and commissionincome 11,946,088 47,999,382 4,028,366 16,262,513

Borrowing fees (2,556,032) (10,270,137) (2,080,953) (8,400,807)Bank charges on borrowings (136,886) (550,008) (147,867) (596,939)Others (1,400) (5,625) (1,635) (6,600)

Total fees and expenses (2,694,318) (10,825,770) (2,230,455) (9,004,346)

Net fees and commissionincome 9,251,770 37,173,612 1,797,911 7,258,167

21. OTHER INCOME

2018 2017USD KHR’000



Loan penalties 4,910,330 19,729,706 1,342,970 5,421,570Loan recoveries 1,512,081 6,075,541 145,998 589,394Gain on disposals 77,155 310,009 34,105 137,682Others 818,984 3,290,678 338,807 1,367,764

7,318,550 29,405,934 1,861,880 7,516,410



37

22. PERSONNEL EXPENSES

2018 2017USD KHR’000



Salaries and wages 33,295,181 133,780,037 30,327,566 122,432,384Bonuses and incentives 8,899,944 35,759,975 6,656,308 26,871,515Employee benefits 1,347,560 5,414,496 1,204,084 4,860,887Staff uniform 240,200 965,124 308,850 1,246,827Medical expenses 61,426 246,810 115,125 464,760Other employee benefits 1,250,083 5,022,833 71,378 288,154

45,094,394 181,189,275 38,683,311 156,164,527

23. GENERAL AND ADMINISTRATIVE EXPENSES

2018 2017USD KHR’000



Rental 3,998,385 16,065,511 3,632,417 14,664,067Donation 2,853,121 11,463,840 129,985 524,749Fuel 2,671,548 10,734,280 2,477,960 10,003,525Transportation 1,092,263 4,388,713 892,458 3,602,853Utilities 973,409 3,911,157 987,788 3,987,700Repairs and maintenance 851,236 3,420,266 823,991 3,326,452Printing and stationery 839,214 3,371,962 865,249 3,493,010Communications 721,535 2,899,128 737,615 2,977,752Marketing and promotions 512,708 2,060,061 622,374 2,512,524License fees 440,665 1,770,592 955,435 3,857,091Travelling 422,862 1,699,060 467,730 1,888,226Professional fees 406,860 1,634,763 313,582 1,265,931Office supplies 368,063 1,478,877 334,926 1,352,096Bank charges 307,428 1,235,246 388,093 1,566,731Other taxes 186,058 747,581 175,719 709,378Training 84,109 337,950 133,979 540,873Other expenses 226,269 909,148 688,730 2,780,403

16,955,733 68,128,135 14,628,031 59,053,361

24. DEPRECIATION AND AMORTIZATION

2018 2017USD KHR’000



Property and equipment 2,163,189 8,691,693 2,393,155 9,661,167Intangible assets 305,293 1,226,668 292,410 1,180,459

2,468,482 9,918,361 2,685,565 10,841,626



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25. NET CASH GENERATED FROM (USED IN) OPERATING ACTIVITIES

2018 2017USD KHR’000



Cash flows from operatingactivitiesProfit before income tax 99,050,974 397,986,814 71,948,202 290,454,892Adjustments for:

Allowance for bad and doubtfulloans 13,402,271 53,850,325 15,013,105 60,607,905Depreciation andamortization 2,469,574 9,918,361 2,685,565 10,841,626Gain on disposals of propertyand equipment (77,155) (310,009) (34,105) (137,682)Loan loss written off 8,113,262 32,599,087 9,513,069 38,404,258Employee benefits expense 1,347,560 5,414,496 1,204,084 4,860,887

Adjusted profit beforeincome tax 124,306,486 499,459,074 100,329,920 405,031,886

Income tax paid (18,061,604) (72,571,525) (14,444,824) (58,313,754)Employee benefits paid (81,156) (326,085) (5,882,835) (23,749,005)

Cash provided by operatingactivities before changesin net operating assetsand liabilities 106,163,726 426,561,464 80,002,261 322,969,127Increase in operating assets

Balances with the NBC (28,371,410) (113,996,325) (24,344,390) (98,278,302)Loans to customers (429,376,755) (1,725,235,802) (537,004,728) (2,167,888,087)Other assets (3,812,168) (15,317,291) (3,828,085) (15,453,981)

Increase in operating liabilitiesDeposits from banks andother financial institutions 12,181,135 48,943,800 34,523,936 139,373,130Deposits from customers 363,985,205 1,462,492,553 261,539,928 1,055,836,688Other liabilities 13,928,460 55,964,552 28,572,141 115,345,733

Net cash generated from(used in) operating activities 34,698,193 139,412,951 (160,538,937) (648,095,692)

26. COMMITMENTS

The Company leases office premises under an operating lease arrangement, with minimumlease commitments as follows:

2018 2017USD KHR’000



Within one year 4,105,115 16,494,352 3,713,576 14,991,706More than 1 year to 5 years 11,739,330 47,168,628 10,716,251 43,261,505More than 5 years 5,836,009 23,449,084 5,920,012 23,899,088

21,680,454 87,112,064 20,349,839 82,152,299



39

26. COMMITMENTS (continued)

In the normal course of business, the Company enters into commitments and incurs certaincontingent liabilities with legal recourse.

27. RELATED PARTY TRANSACTIONS AND BALANCES

Significant transactions with related parties during the year were as follows:

Related party Transaction 2018 2017USD KHR’000



Board ofDirectors

Fees and relatedexpensesInterest expense

326,256

181,424

1,310,897

728,962

298,350

-

1,204,439

-Shareholders Interest expense 979,117 3,934,090 479,929 1,937,473

Fees andcommissions onloans 32,665 131,248 20,787 83,917

Keymanagementpersonnel

Salaries andemployee benefits 1,246,904 5,010,060 1,173,431 4,737,141Interest expense 211,689 850,566 - -Employee benefitsexpense 38,880 156,220 49,425 199,529

Balances with related parties at the reporting year were as follows:

Related party Account 2018 2017USD KHR’000



Directors and keymanagementpersonnel

DepositsLoans

5,586,532-

22,446,686-

4,503,416-

18,180,290-

PSCo Deposits 937,026 3,764,970 4,678,320 18,886,378BEA Borrowing 10,000,000 40,180,000 - -

28. FINANCIAL RISK MANAGEMENT

The Company’s activities are exposed to a variety of financial risks: credit risk, market risk(including currency risk and interest rate risk), and liquidity risk. Taking risk is core to thefinancial business, and operational risks are an inevitable consequence of being in business.

The Company intends to comply with the NBC’s regulations for financial risk managementpurposes. The Company however recognizes that international best practices on riskmanagement are yet to be fully implemented. The Board of Directors has established an assetand liability management committee and risk management committee to formulate broadparameters of acceptable risk for the Company and monitor the activities against theseparameters.



40

28. FINANCIAL RISK MANAGEMENT (continued)

The Company holds the following financial assets and liabilities:

2018 2017USD KHR’000



Financial assetsCash on hand 109,863,596 441,431,929 75,102,882 303,190,335Balances with the NBC 173,925,316 698,831,922 23,959,355 96,723,916Balances with other banks 7,356,281 29,557,537 10,287,623 41,531,134Loans to customers 1,936,725,039 7,781,761,207 1,528,863,817 6,172,023,229Other assets 16,370,478 65,776,580 14,289,040 57,684,855

Total financial assets 2,244,240,710 9,017,359,175 1,652,502,717 6,671,153,469

Financial liabilitiesDeposits from banks andother financial institutions 53,986,218 216,916,624 41,805,083 168,767,120Deposits from customers 1,237,292,967 4,971,443,141 873,307,762 3,525,543,435Borrowings 621,386,452 2,496,730,764 476,681,777 1,924,364,334Subordinated debts 69,453,307 279,063,388 64,716,264 261,259,558Other liabilities 66,690,015 267,960,480 52,302,804 211,146,420

Total financial liabilities 2,048,808,959 8,232,114,397 1,508,813,690 6,091,080,867

Capital management

The primary objectives of the Company’s capital management are to ensure that it complieswith externally imposed capital requirements and maintains strong financial position andhealthy capital ratios to support its business and to maximize shareholders’ value.

The Company manages its capital structure and makes adjustments to it in the light ofchanges in economic conditions and the risk characteristics of its activities. In order tomaintain or adjust the capital structure, the Company may adjust the amount of dividendpayment to shareholders or return on capital. No changes were made in the objectives,policies and processes from previous years.

Net worth and risk-weighted assets are computed based on NBC regulations. Managementbelieves the Company is compliant with the solvency ratio prescribed by the NBC and allexternally imposed capital requirements.

28.1 Credit risk

The Company takes on exposure to credit risk, which is the risk that counterparty will causea financial loss to the Company by failing to discharge an obligation. Credit risk is the mostimportant risk for the Company’s business. Credit exposure arises principally in lendingactivities that lead to loans to customers. The credit risk management is carried out by thecredit committee.

(a) Credit risk measurement

The Company assesses the probability of default of individual counterparties inaccordance with its credit policy, procedures and practices. The credit committee isresponsible for determining the appropriateness and sufficiency of its credit policies.



41


28.1 Credit risk (continued)

(b) Risk limit control and mitigation policy

The Company operates and provides loans to individuals within the Kingdom ofCambodia. The Company manages limits and controls the concentration of credit riskwhenever it is identified. Large exposure is defined by the NBC as overall credit exposureto any single beneficiary which exceeds 2% for individual loan and 3% for group loan ofthe Company’s net worth under the conditions of Prakas No. B7-07-163.

The Company also employs a range of policies and practices to mitigate credit risk. Themost traditional of these is the taking of security in the form of collateral for loans tocustomers, which is common practice. The Company also accepts personal guaranteefor the village bank loans. The Company implements guidelines on the acceptability ofspecific classes of collateral or credit risk mitigation. The principal collateral types forloans to customers are:§ Mortgages over residential properties (land, building and other properties); and§ Charges over business assets such as land and buildings.

(c) Impairment and provisioning policy

The Company is required to follow the mandatory credit classification and provisioning inaccordance with the relevant Prakas, as disclosed in Note 2.3.7.1.

(d) Loans to customers

Loans to customers are summarized as follows:

2018 2017USD KHR’000



Loans to customersneither past due norimpaired (i) 1,947,713,902 7,825,914,458 1,537,260,112 6,205,919,073Loans to customerspast due but notimpaired (ii) 1,814,720 7,291,547 1,725,175 6,964,531Loans to customersindividually impaired(iii) 12,480,946 50,148,440 9,874,050 39,861,540

Loans to customers,gross 1,962,009,568 7,883,354,445 1,548,859,337 6,252,745,144

For purposes of loan provisioning, expected recovery from collateral (except cash) is nottaken into consideration based on NBC’s requirement.

(i) Loans to customers neither past due nor impaired

Loans to customers’ not past due are not considered impaired, unless otherinformation is available to indicate the contrary.

(ii) Loans to customers past due but not impaired

Loans to customers with past due less than 15 days (short-term loan) and 30 dayspast due (long-term loan) are not considered impaired, unless other information isavailable to indicate the contrary.



42


28.1 Credit risk (continued)

(d) Loans to customers (continued)

(iii) Loans to customers individually impaired

In accordance with Prakas No. B7-17-344 dated 1 December 2017 on Credit RiskGrading and Impairment Provisioning, loans and advances that are classified as sub-standard, doubtful and loss are considered as non-performing and impaired. As such,specific minimum level of provision for impairment is made depending on the loanclassification, unless other information is available to indicate the contrary.

28.2 Operational risk

The operational risk losses which would result from inadequate or failed internal processes,people and systems or from external factors are managed through established operationalrisk management processes, proper monitoring and reporting of the business activities bycontrol and support units which are independent of the business units and oversight providedby the management.

The operational risk management entails the establishment of clear organizational structure,roles and control policies. Various internal control policies and measures have beenimplemented. These include the establishment of signing authorities, defining systemparameters controls, streamlining procedures and documentation. These are reviewedcontinually to address the operational risks of its business.

28.3 Market risk

The Company takes on exposure to market risk, which is the risk that the fair value or futurecash flow of a financial instrument will fluctuate because of changes in market prices. Marketrisk arises from open positions in interest rates, currency and equity products, all of which areexposed to general and specific market movements and changes in the level of volatility ofmarket rates or prices such as interest rates, credit spreads, foreign exchange rates andequity prices.

(i) Foreign exchange risk

The Company operates in the Kingdom of Cambodia and transacts in USD, KHR andTHB.

Foreign exchange risk arises from future commercial transactions and recognized assetsand liabilities denominated in a currency that is not the Company’s functional currency.



43


28.3 Market risk (continued)

(i) Foreign exchange risk (continued)

The balances in monetary assets and liabilities denominated in their respective currencies, expressed in USD, are as follows:

2018 2017USD KHR THB USD KHR THB

On-balance sheet itemsFinancial assetsCash on hand 80,918,700 26,104,288 2,840,608 55,689,213 17,958,417 1,455,252Balances with the NBC 155,305,447 18,619,869 - 10,634,104 13,325,251 -Balances with other banks 6,565,095 782,867 8,319 9,502,063 779,940 5,620Loans to customers 1,727,776,749 141,575,154 67,373,136 1,376,247,618 100,840,470 51,775,729Other assets 14,207,163 1,460,390 702,925 12,356,101 1,319,330 613,609

Total financial assets 1,984,773,154 188,542,568 70,924,988 1,464,429,099 134,223,408 53,850,210

Financial liabilitiesDeposits from banks andother financial institutions 48,272,484 5,713,583 151 34,065,097 7,739,986 -Deposits from customers 1,124,957,623 101,278,189 11,057,155 751,918,101 112,147,908 9,241,753Borrowings 536,801,719 42,864,111 41,720,622 427,853,731 8,494,055 40,333,991Subordinated debts 54,500,000 14,953,307 - 49,833,333 14,882,931 -Other liabilities 58,849,852 5,472,419 2,367,744 45,218,667 5,148,416 1,935,721

Total financial liabilities 1,823,381,678 170,281,609 55,145,672 1,308,888,929 148,413,296 51,511,465

161,391,476 18,260,959 15,779,316 155,540,170 (14,189,888) 2,338,745



44



(ii) Price risk

The Company is not exposed to securities price risk because it does not hold anyinvestment classified in the balance sheet either as available for sale or at fair valuethrough profit or loss.

(iii) Interest rate risk

Cash flow interest rate risk is the risk that the future cash flows of a financial instrumentwill fluctuate because of changes in market interest rates. Fair value interest rate risk isthe risk that the value of a financial instrument will fluctuate because of changes in marketinterest rates. Interest margins may increase as a result of changes and may reducelosses in the event that unexpected movements arise. The management of the Company,at this stage, does not have a policy to set limits on the level of mismatch of interest ratere-pricing that may be undertaken; however, management regularly monitors themismatch.

Interest rate risk arises from the possibility that changes in interest rates will affect futureprofitability or the fair values of financial instruments. The Company is exposed to interestrate risk as a result of mismatches of interest rate re-pricing of assets and liabilities. TheCompany manages this risk by matching the re-pricing of assets and liabilities throughrisk management strategies.

The Company has no significant financial assets and liabilities with floating interest rates.Balances with the NBC and balances with other banks earn fixed interest for the periodof the deposit while loans to customers earn fixed interest based on the outstandingbalance over the agreed term.



45



(iii) Interest rate risk (continued)

Up to1 month

>1 to 3months

>3 to 12months >1 to 5 years Over 5 years

Non-interestsensitive Total

USD USD USD USD USD USD USD

31 December 2018Financial assetsCash on hand - - - - - 109,863,596 109,863,596Balances with the NBC 137,466,401 - 149,552 - - 36,309,363 173,925,316Balances with other banks 58,072 - - - - 7,298,209 7,356,281Loans to customers 53,784,456 107,463,779 421,535,332 1,230,696,658 123,244,814 - 1,936,725,039Other assets - - - - - 16,370,478 16,370,478

191,308,929 107,463,779 421,684,884 1,230,696,658 123,244,814 169,841,646 2,244,240,710

Financial liabilitiesDeposits from banks and otherfinancial institutions 6,487,537 9,174,888 30,823,793 7,500,000 - - 53,986,218Deposits from customers 243,705,159 220,217,126 710,824,921 62,545,761 - - 1,237,292,967Borrowings 120,962,707 22,419,335 123,137,812 354,866,598 - - 621,386,452Subordinated debts 8,000,000 1,666,667 8,666,667 32,166,666 18,953,307 - 69,453,307Other liabilities - - - - - 66,690,015 66,690,015

379,155,403 253,478,016 873,453,193 457,079,025 18,953,307 66,690,015 2,048,808,959

Maturity gap (187,846,474) (146,014,237) (451,768,309) 773,617,633 104,291,507 103,151,631 195,431,751

KHR’000 equivalent (Note 2.1) (754,767,133) (586,685,204) (1,815,205,066) 3,108,395,649 419,043,275 414,463,253 785,244,774



46



(iii) Interest rate risk (continued)

Up to1 month

>1 to 3months


Non-interestsensitive Total


31 December 2017Financial assetsCash on hand - - - - - 75,102,882 75,102,882Balances with the NBC 9,908,348 - 149,083 - - 13,901,924 23,959,355Balances with other banks 2,037,700 - - - - 8,249,923 10,287,623Loans to customers 47,065,250 94,319,226 354,885,156 917,151,796 115,442,389 - 1,528,863,817Other assets - - - - - 14,289,040 14,289,040

59,011,298 94,319,226 355,034,239 917,151,796 115,442,389 111,543,769 1,652,502,717

Financial liabilitiesDeposits from banks and otherfinancial institutions 10,092,186 7,210,389 24,502,508 - - - 41,805,083Deposits from customers 184,282,471 205,025,696 440,605,568 43,394,027 - - 873,307,762Borrowings 5,572,648 8,820,516 95,801,872 366,486,741 - - 476,681,777Subordinated debts 1,000,000 1,666,667 7,666,667 37,500,000 16,882,930 - 64,716,264Other liabilities - - - - - 52,302,804 52,302,804

200,947,305 222,723,268 568,576,615 447,380,768 16,882,930 52,302,804 1,508,813,690

Maturity gap (141,936,007) (128,404,042) (213,542,376) 469,771,028 98,559,459 59,240,965 143,689,027

KHR’000 equivalent (Note 2.1) (572,995,660) (518,367,118) (862,070,572) 1,896,465,640 397,884,536 239,155,775 580,072,601



47


28.4 Liquidity risk

Liquidity risk is the risk that the Company is unable to meet its payment obligations associated with its financial liabilities when they fall due and to replacefunds when they are withdrawn. The consequence of this may be the failure to meet obligations to repay depositors and fulfil commitments to lend.

Management monitors balance sheet liquidity and manages the concentration and profile of debt maturities. Monitoring and reporting take the form of thedaily cash position and projection for the next day, week and month, respectively, as these are key periods for liquidity management. Management monitorsthe movements of the main depositors and projection of their withdrawals.

The following tables present an analysis of the assets and liabilities of the Company by relevant maturity based on the remaining period at the balance sheetdate to the contractual or estimated maturity dates.

Up to1 month >1 to 3 months


No fixedmaturity date Total

USD USD USD USD USD USD USD31 December 2018Financial assetsCash on hand 109,863,596 - - - - - 109,863,596Balances with the NBC 173,925,316 - - - - - 173,925,316Balances with other banks 7,356,281 - - - - - 7,356,281Loans to customers 53,784,456 107,463,779 421,535,332 1,230,696,658 123,244,814 - 1,936,725,039Other assets 16,342,311 - - - - 28,167 16,370,478

Total financial assets 361,271,960 107,463,779 421,535,332 1,230,696,658 123,244,814 28,167 2,244,240,710

Financial liabilitiesDeposits from banks and otherfinancial institutions 6,487,537 9,174,888 30,823,793 7,500,000 - - 53,986,218Deposits from customers 243,705,159 220,217,126 710,824,921 62,545,761 - - 1,237,292,967Borrowings 120,962,707 22,419,335 123,137,812 354,866,598 - - 621,386,452Subordinated debts 8,000,000 1,666,667 8,666,667 32,166,666 18,953,307 - 69,453,307Other liabilities 66,690,015 - - - - - 66,690,015

Total financial liabilities 445,845,418 253,478,016 873,453,193 457,079,025 18,953,307 - 2,048,808,959

Net liquidity surplus (gap) (84,573,458) (146,014,237) (451,917,861) 773,617,633 104,291,507 28,167 195,431,751

KHR’000 equivalent (Note 2.1) (339,816,153) (586,685,204) (1,815,805,965) 3,108,395,649 419,043,275 113,175 785,244,778



48


28.4. Liquidity risk (continued)





31 December 2017 (As reclassified – Note 31)Financial assetsCash on hand 75,102,882 - - - - - 75,102,882Balances with the NBC 9,908,348 - 149,083 - - 13,901,924 23,959,355Balances with other banks 10,287,623 - - - - - 10,287,623Loans to customers 47,065,250 94,319,226 354,885,156 917,151,796 115,442,389 - 1,528,863,817Other assets 14,084,914 - 175,959 - - 28,167 14,289,040

Total financial assets 156,449,017 94,319,226 355,210,198 917,151,796 115,442,389 13,930,091 1,652,502,717

Financial liabilitiesDeposits from banks and otherfinancial institutions 10,092,186 7,210,389 24,502,508 - - - 41,805,083Deposits from customers 184,282,471 205,025,696 440,605,568 43,394,027 - - 873,307,762Borrowings 5,572,648 8,820,516 95,801,872 366,486,741 - - 476,681,777Subordinated debts 1,000,000 1,666,667 7,666,667 37,500,000 16,882,930 - 64,716,264Other liabilities 28,536,373 8,703,439 12,848,833 2,214,159 - - 52,302,804

Total financial liabilities 229,483,678 231,426,707 581,425,448 449,594,927 16,882,930 - 1,508,813,690

Net liquidity surplus (gap) (73,034,661) (137,107,481) (226,215,250) 467,556,869 98,559,459 13,930,091 143,689,027

KHR’000 equivalent (Note 2.1) (294,840,926) (553,502,901) (913,230,964) 1,887,527,080 397,884,536 56,235,777 580,072,602

PRASAC Microfinance Institution Limited


49


28.5 Fair value of financial assets and liabilities

Fair value represents the amount at which an asset could be exchanged or a liability settledon an arms-length basis. As verifiable market prices are not available, market prices are notavailable for a significant proportion of the Company’s financial assets and liabilities. Fairvalues, therefore, have been based on management assumptions according to the profile ofthe asset and liability base. Management believes that the carrying amounts of the financialassets and liabilities included in the balance sheet are a reasonable estimation of their fairvalues. In making this assessment, management assumes that loans to customers are mainlyheld to maturity with fair values equal to the book value of loans to customers adjusted forprovision for loan losses, if any.

29. SUBSEQUENT EVENTS

Other than as disclosed elsewhere in these financial statements, at the date of this report,there were no other events which occurred subsequent to 31 December 2018 that hadsignificant impact on the balance sheet of the Company as at 31 December 2018, and itsfinancial performance for the year then ended.

30. TAX CONTINGENCY

The taxation system in Cambodia is characterized by numerous taxes and frequentlychanging legislation, which is often unclear, contradictory and subject to interpretation. Often,differing interpretations exist among numerous taxation authorities and jurisdictions. Taxesare subject to review and investigation by a number of authorities, who are enabled by law toimpose severe fines, penalties and interest charges. These facts may create tax risks inCambodia substantially more significant than in other countries. Management believes that ithas adequately provided for tax liabilities based on its interpretation of tax legislation.However, the relevant authorities may have differing interpretations and the effects since theincorporation of the Company could be significant.

PRASAC Microfinance Institution Limited


50

31. RECLASSIFICATION OF CORRESPONDING FIGURES

Certain corresponding figures have been reclassified to conform with this year’s presentation, as follows:

As previously presented As reclassifiedUSD KHR’000 USD KHR’000

Statement of cash flows(Note 2.1) (Note 2.1)

Net interest income (138,390,784) (558,683,595) - -Interest received 227,611,713 918,868,485 - -Interest paid (83,267,682) (336,151,632) - -Other assets (640,651) (2,586,309) (3,828,085) (15,453,979)





Note 28.4. Liquidity riskLoans to customersAs previously presented 69,837,428 134,207,359 507,687,655 1,204,930,631 135,414,176 - 2,052,077,249As reclassified 47,065,250 94,319,226 354,885,156 917,151,796 115,442,389 - 1,528,863,817

Deposits from banks and otherfinancial institutionsAs previously presented 10,104,130 7,258,474 25,345,894 - - - 42,708,498As reclassified 10,092,186 7,210,389 24,502,508 - - - 41,805,083

Deposits from customersAs previously presented 184,737,734 207,462,657 460,699,112 51,078,706 - - 903,978,209As reclassified 184,282,471 205,025,696 440,605,568 43,394,027 - - 873,307,762

prasac microfinance institution limited

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