Annual Report 2016 ក រ មហ នភត សន ហ រញ ញវតថ អ ល ន ល ស ង ភ លស. ELIN Leasing Plc (Financial Leasing)

Transcription

1 Annual Report 2016 ក រ មហ នភត សន ហ រញ ញវតថ អ ល ន ល ស ង ភ លស ELIN Leasing Plc (Financial Leasing)

2 Table of Content 1. Company Profile Page 3 2. Message from Chairman Page 4 3. Message from Chief Executive Officer Page 5 4. Organizational Chart Page 6 5. Board of Directors and Chief Executive Officer Page 7 6. Products and Services Page 9 7. Corporate Social Responsibility Page Report of the Board of Directors Page Independent Auditor s Report Page Financial Statements Page Our Partners Page 21 2

3 1. Company Profile ELIN Leasing Plc is a public limited company operating under License No. Co KH/2014 issued by the Ministry of Commerce ( MoC ) on 8 December, On 17 February, 2015, the Company obtained its license from the National Bank of Cambodia ( NBC ) to carry out financial leasing business. The principal activity of the Company is to carry out finance leasing business and any other forms of financing operation permitted by the NBC. Our vision is to become the most respected, innovative and profitable financial leasing company in Cambodia. Our mission is to nurture long term sustainable and profitable growth through innovative products and services and to invest in continuous knowledge and skill learning so our people can stay relevant and serve our customers better. Our Purpose Is help our customers and stakeholders achieve their aspirations by providing innovative financial leasing that meets their needs. Our Values Drive Our Success 1. Customers: We pay attention and listen to our customers to understand their needs. We build enduring relationships with them by delivering superior products and quality service. 2. People: We treat and respect each other fairly. We invest in our people to help them realize their full potential. We recognise and reward our people for outstanding performance. 3. Teamwork: We actively support each other as we work towards our common purpose and acknowledge total responsibility from ourselves as individuals. 4. Integrity: Is the cornerstone of our success and is non-negotiable. 5. Prudent risk takers: We are prudent in our investment because our stakeholders rely on us. 3

4 2. Message from Chairman 2016 marks a significant milestone for ELIN Leasing with remarkable achievements including huge increase in the number of customers we served and decent profit for the shareholders after getting started in early At the beginning, we looked deeply into the market identifying risks and opportunities in the face of increasing competitions in the leasing sector in specific and financial services at large. We asked how we could serve more customers who need the services effectively and efficiently. As exhibited by the result, the strategy we put forward works and pays off nicely. We will continue to implement the same strategy with more focus on in-house human resource developments and refined efficient system in business operation to adapt to market needs. Cambodia economic outlook remains in strong growth category with GDP for 2017 projected to be around 6-7%. Growth means more incomes and purchasing powers which could be translated into the business opportunities for ELIN Leasing business. Ty Chandy Chairman of BoD Going forward, we will continue to improve market positioning and efficiencies to achieve greater results and deliver value for the shareholders. We re hopeful for the future of our business especially after the great achievement this year. 4

5 3. Message from Chief Executive Officer Srun Sokheang Chief Executive Officer I would like to begin with a sincere appreciation of our customers who give chance to serve in a very competitive market environment. I also like to thank our team from BoD, the management and staff for their hard work and commitment in taking the company to achieve the great performance for Number of customer we serve increases as expected. The company made profits generating value for our shareholders two years into the operation. While we take a moment to celebrate, we definitely continue to analyse the market and overall operating condition to ensure we are able to realize the opportunities and better equipped to deal with potential risks to business operation. As we grow, we need to continue to invest in our human resources even more to improve their skills to meet with tomorrow challenges. One of the pillars in our strategy is to ensure there is enough efficiency in the business process so that we achieve results without adding more cost to the business. We seek to understand the different parts of the business for the purpose of providing the best customer experiences we can offer to our clients result has been remarkable. The strong performance makes us more hopeful than ever that our business will be stronger going into the

6 4. Organizational Chart Shareholders Board of Directors Board Committees Risk Management Audit Internal Audit Chief Executive Officer Management Committee Business Plan Executive Committee Human Resource Finance Department Human Resource Department Collection Department Marketing Department Operation Department Accounting Current Collection Assessment Information Technology Delinquent Collection 6

7 5. Board of Directors and Chief Executive Officer Chairman of Board of Directors Ty Chandy Mr. Chandy is currently the HR Manager at International School of Phnom Penh. He has extensive experience in the field of human resource development and administration. Before joining ISPP he served in various senior positions in different industries including education, microfinance and hotel. He was HR Manger for AEON Microfinance. Before that he held the same position at Cambodia Utilities. Independent Director Dao Cambodochine Mr. Chine is currently Senior Consultant for Asian Synergy Consulting Service Co Ltd. He holds senior consultant positions at various ministries and international organizations. He served as Chief Financial Officer at J-Net Group Inc. in Boston, MA, USA. Other experience includes an Economist at Pru- Bache Security, Bethesda, MD USA and Area Supervisor, McDonald s Corp Fairfax, VA, USA. Independent Director Um Rachny Mrs. Rachny (Grace) is an Executive Director of Century 21 Cambodia and a Vice President of Cambodian Valuers and Estate Agents Association (CVEA), BoD of Cambodian Investor s Club (CIC), BoD of Foundation of Hope, Committee Member of CWEA, Member of Cambodian Chamber of Commerce (CCC). Grace is Managing Director & Executive Coach of a Singapore firm base in Cambodia, JM 88 Asia (Cambodia) Co., Ltd. 7

8 Non-Executive Director Mr. Narath is the General Manager of Asian Synergy Consulting Service Co Ltd., a business consulting and research firm. He is also the General Manager at SPL Co., Ltd. an Import-Export and real estate agent. Leang Phuong Bunnnartah He obtained his master degree in Business and Economic in 2013 from University of Greenwich, United Kingdom. Non-Executive Director Chheng Makara Mr. Makara is an experienced Finance and Operation specialist. He is serving as the head of finance and operation at The Asia Foundation. Before that, he worked at Pact in Myanmar managing $5M annual budget awarded to local and international NGOs under one of the largest USAID-funded project. He served in a number of capacities as finance and grant manager at a number of organizations such as Pact and Conservation international. Chief Executive Officer Chief Executive Officer Mr. Sokheang is the Founder of ELIN Leasing. He has more than 15 years of work experienced in the field of financial and risk management in financial industry. He was among a team responsible for setting up ACLEDA Bank in Lao and AEON Microfinance (Cambodia) Srun Sokheang Senior positions he held include Chief Financial Officer at ACLEDA Bank Loas, Finance Manager at ANZ Loas and Senior Manager at AEON Microfinance. 8

9 6. Products and Services Smart phone is no longer a life style. It has become life companion. Owning a smart phone is an investment beyond connectivity. Users can now take advantage of internet and advanced technologies available on smart phone to tap into vast network of information and data which expand knowledge and empower users while they enjoy myriad of entertainment services. Leasing Products Brand new and second hand smart phones Electronic devices Motorcycles Others Application Conditions Age years old Monthly income US$130 up Instalment term 12 months Required Documents National ID card Current living address family book and residential address issued from commune Income document salary certificate and employee contract 9

10 7. Corporate Social Responsibility Making contribution back to society is our pursuit beyond profits. That is why ELIN Leasing incorporates social responsibility into its business and operations. Donation to M'Lop Tapang Organization M'Lop Tapang Organization supports over 5,000 children, youth and families in the Sihanoukville area. M Lop Tapang provides disadvantaged children and families access to the learning tools, specialized services, resources, and opportunities they need to build a better future. The NGO offer regular meals, safe temporary shelter, medical care, education and training, counseling, family support / reintegration and protection from all types of abuse as well as increasing community awareness about issues relative to children safety and children s rights. 10

11 8. Report of the Board of Directors The Board of Directors of ELIN Leasing Pic. ("the Company") is pleased to present its report and the Company's financial statements as at 31 December 2016 and for the year then ended. THE COMPANY The Company is a public limited company operating under License No. Co KH/2014 issued by the Ministry of Commerce ("MoC") on 8 December On 17 February 2015, the Company obtained its license from the National Bank of Cambodia ("NBC") to carry out financial leasing business. The principal activity of the Company is to carry out finance leasing business and any other forms of financing operation permitted by the NBC. The Company's registered office address is at No.186 Ekareach Street, Phum 2, Sangkat 2, Krong PreahSihanouk, Preah Sihanouk Province, Kingdom of Cambodia. RESULTS The net profit for the year amounted to US$ 63,071 or KHR' ,627 (2015: net loss of US$ 73,267 or KHR' ,464). DIVIDENDS No dividend was declared or paid and the directors do not recommend any dividend to be paid for the current year. PAID-UP CAPITAL The Company's paid-up capital during the year increased by US$ 172,500 or KHR' ,143 (2015: US$ 63,071 or KHR' ,627). RESERVES AND PROVISIONS There were no material movements to or from reserves and provisions during the financial year other than those disclosed in the financial statements. EVENTS AFTER THE REPORTING PERIOD There have been no significant events occurring during the period between the end of the reporting period and the date of authorisation of these financial statements, which would require adjustments or disclosures to be made in the financial statements 11

12 THE BOARD OF DIRECTORS The members of the Board of Directors of the Company during the year and at the date of this report are: Mr. Ty Chandy Mr. Leang Phuong Bunnarath Mr. Chheng Makara Mr. Dao Cambodochine Ms. Um Rachny Chairman Director Director Independent Director Independent Director AUDITOR Earnst & Young (Cambodia) is the auditor of the Company. DIRECTORS INTEREST As of 31 December 2016 the following directors hold the following shares of the Company US$ KHR 000 US$ KHR 000 Mr. Leang Phuong Bunnarath 90, ,330 45, ,250 Mr. Chheng Makara 81, ,997 40, ,904 Mr Ty Chandy 27, ,613 27, , , , , ,930 DIRECTORS BENEFIT During and at the end of the period, no arrangement existed, to which the Company was a party to, with the object of the enabling directors of the Company to acquire benefits by mean of the acquisition of shares in or debenture of the Company or any other corporate body. No directors of the Company has received or become entitled to receive any benefit by reason of a contract made by the Company or with a firm which the director is a member or which a company which the directors has a material financial interest. STATEMENT OF THE BOARD OF DIRECTORS RESPONSIBILITY IN RESPECT OF THE FINANCIAL STATEMENTS The Board of Directors is responsible for ensuring that the financial statements give a true and fair view of the financial position of the Company as at 31 December 2016, and its financial performance and its cash flows for the year then ended. The Board of Directors oversees the preparation of these financial statements by management who is required to: Adopt appropriate accounting policies which are supported by reasonable and prudent judgments and estimates and then apply them consistently; Comply with the disclosure requirements of Cambodian International Financial Reporting Standards ( CIFRSs ) or, if there has been any 12

13 departure in the interest of fair presentation, ensure this has been appropriately disclosed, explained and quantified in the financial statements; Maintain adequate accounting records and an effective system of internal controls; Prepare the financial statements on a going concern basis unless it is inappropriate to assume that the Company will continue operations in the foreseeable future; and Set overall policies for the Company, ratify all decisions and actions by management that have a material effect on the operations and performance of the Company, and ensure they have been properly reflected in the financial statements. STATEMENT BY MANAGEMENT We, the undersigned, begin the management of ELIN Leasing Plc. do hereby state that in our opinion, the accompanying supplementary financial information consisting of the disclosure requirement set by the relevant Prakas of the National Bank of Cambodia (NBC) is properly drawn up so as to reflect fairly the required financial information of the Company as at 31 December Information and data contained herein are the responsibility of the management of the Company. On behalf of the Board of Director Phnom Penh, Kingdom of Cambodia 28 April

14 9. Independent Auditor s Report OPINION We have audited the accompanying financial statements of ELIN Leasing Pic. ("the Company") which comprise the statement of financial position as at 31 December 2016, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the financial statements give a true and fair view of the financial position of the Company as at 31 December 2016, and its financial performance and its cash flows for the year then ended in accordance with Cambodian International Financial Reporting Standards. BASIS FOR OPINION We conducted our audit in accordance with Cambodian International Standards on Auditing ("CISAs"). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the sub-decree on the Code of Ethics for Professional Accountants and Auditors promulgated by the Royal Government of Cambodia, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. RESPONSIBILITIES OF MANAGEMENT AND THE BOARD OF DIRECTORS OF THE FINANCIAL STATEMENTS Management is responsible for the preparation of financial statements that give a true and fair view in accordance with Cambodian International Financial Reporting Standards and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Board of Directors is responsible for overseeing the Company's financial reporting process. AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted 14

15 in accordance with CISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with CISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 15

16 We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Ernst & Young (Cambodia) Ltd. Certified Public Accountants Registered Auditors Phnom Penh, Kingdom of Cambodia 28 April

17 10. Financial Statements STATEMENT OF FINANCIAL POSITION as at 31 December 2016 Notes 31 December December 2015 US$ KHR 000 US$ KHR 000 (Note 2.1.3) (Note 2.1.3) (As restated Note 20) ASSETS Cash on hand and in bank 4 11,874 47,935 4,993 20,222 Balances with the National Bank of Cambodia 5 192, ,233 20,575 83,329 Loans and receivables 6 903,009 3,645, ,975 2,595,949 Property and equipment 7 22,640 91,398 9,109 36,892 Computer software 8 10,416 42,049 13,573 54,971 Other assets 9 15,054 60,773 14,281 57,838 TOTAL ASSETS 1,155,768 4,665, ,506 2,849,201 LIABILITIES AND EQUITY Liabilities Borrowings 1 559,306 2,257, ,500 1,326,375 Accruals and other payables 1 21,397 86,380 37, ,670 Income tax payable 15 1,204 4, ,313 Deferred tax liability Total liabilities 581,964 2,349, ,273 1,479,358 Equity Share capital ,000 2,369, ,500 1,670,690 Accumulated losses (10,196) (41,837) (73,267) (297,464) Cumulative exchange differences - (11,549) - (3,383) Total equity 573,804 2,316, ,233 1,369,843 TOTAL LIABILITIES AND 1,155,768 4,665, ,506 2,849,201 17

18 STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 December 2016 For the period from For the year ended 17 February 2015 to 31 December December 2015 Notes US$ KHR 000 US$ KHR 000 (Note 2.1.3) (Note 2.1.3) (As restated Note 20) Operating income Finance income 6 422,153 1,710, , ,729 Interest expense 10 (50,173) (203,351) (39,718) (161,256) Net interest income 371,980 1,507, , ,473 Other income 8,467 34,317 3,679 14,937 Total operating income 380,447 1,541, , ,410 Provision for credit losses General and administrative 6 (1,921) (7,786) (3,302) (13,407) expenses 14 (310,343) (1,257,820) (221,258) (898,306) Income (loss) before income 68, ,346 (71,257) (289,303) tax Income tax expense 15 (5,112) (20,719) (2,010) (8,161) Net income (loss) for the year/period 63, ,627 (73,267) (297,464) Exchange difference on - (8,166) - (3,383) translation Total comprehensive income (loss) for the year/period 63, ,461 (73,267) (300,847) 18

19 STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2016 Paid-Up Capital US$ KHR' 000 (Note 2.1.3) Accumulated losses US$ KHR' 000 (Note 2.1.3) Cumulative exchange differences KHR' 000 (Note 2.1.3) Total US$ KHR 000 (Note 2.1.3) As at 1 January 2016 (as restated Note 20) 411,500 1,670,690 (73,267) (297,464) (3,383) 338,233 1,369,843 Issuance of shares 172, , , ,143 Net income for the year , ,627-63, ,627 Exchange differences on translation (8,166) - (8,166) As at 31 December ,000 2,369,833 (10,196) (41,837) (11,549) 573,804 2,316,447 As at 17 February 2015 Issuance of shares - 411,500-1,670, ,500-1,670,690 Net loss for the period - - (73,267) (297,464) - (73,267) (297,464) Exchange differences on translation (3,383) - (3,383) As at 31 December 2015 (as restated Note 20) 411,500 1,670,690 (73,267) (297,464) (3,383) 338,233 1,369,843 19

20 STATEMENT OF CASH FLOWS for the year ended 31 December 2016 For the year ended 31 December 2016 Note US$ KHR 000 (Note 2.1.3) For the period from 17 February 2015 to 31 December 2015 US$ KHR 000 (Note 2.1.3) (As restated Note 20) OPERATING ACTIVITIES Income (loss) before income tax Depreciation and 68, ,346 (71,257) (289,303) amortization 7, 8 10,683 43,298 13,835 56,170 Working capital changes: Loans and receivables (262,034) (1,062,024) (640,975) (2,602,359) Other assets (773) (3,133) (14,281) (57,981) Accruals and other payables (16,052) (65,059) 37, ,043 (199,993) (810,572) (675,229) (2,741,430) Income tax paid 15 (4,175) (16,921) (1,686) (6,845) Net cash used in operating activities (204,168) (827,493) (676,915) (2,748,275) INVESTING ACTIVITIES Capital guarantee deposit 5 (8,625) (34,957) (20,575) (83,535) Acquisition of: Property and equipment 7 (21,057) (85,344) (12,754) (51,781) Computer software (23,763) (96,478) Cash used in investing activities (29,682) (120,301) (57,092) (231,794) FINANCING ACTIVITIES Capital contribution , , ,500 1,670,690 Borrowings made ,806 3,938, ,500 2,750,650 Repayments made 10 (740,000) (2,999,220) (350,000) (1,421,000) Net cash from financing activities 404,306 1,638, ,000 3,000,340 Net increase in cash and cash equivalents during the year/period 170, ,859 4,993 20,271 Cash and cash equivalents at beginning of the year/period 4,993 20, Exchange differences on translation - (2,794) - (49) Cash and cash equivalents at end of the year/period 4 175, ,287 4,993 20,222 20

21 11. Our Partner Bill Collector Auto Debit Auditors EY has been been ELIN s auditor for 2 consecutive years for the period