EQUITABLE CAMBODIA. Financial Statements For the year ended 31 December 2017 and Report of the Independent Auditors

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1 EQUITABLE CAMBODIA Financial Statements For the year ended 31 December 2017 and Report of the Independent Auditors

2 Organisation information Organisation Name Equitable Cambodia Operating License Registered with the Ministry of Interior in March 2012 Funding Agency Diakonia Open Society Institute Bread for the World Oxfam Novib Norwegian People's Aid The Mekong Regional Land Governance Project Strengthening Accountability in the Global Economy DanChurchAid/Christian Aid Netherlands Organisation for Scientific Research The McKnight Foundation/SADP DanChurchAid/Youth of Equality Heinrich Boll Stiftung Foundation Civil Rights Defenders Inclusive Development International Planet Wheeler Foundation Board of Directors Mr. Keng BunChhoeuth Chairman (resigned on 31 July 2017) Mr. Preap Kol Member (resigned on 29 September 2017) Ms. Jocelyn Medallo Member Ms. Christina Ingmire Member Mr. Meas Kimseng Member Organisation Management Mr. Eang Vuthy Executive Director Mrs.Chhit Maria Finance Manager Mr. Bun Makara Program Manager Mr. Leng Sarorn Program Manager Mr. Heang Sokun Program Manager Registered Office No. 55, Street 101, Sangkat Boeung Trabek, Khan Chamkarmorn, Phnom Penh, Kingdom of Cambodia Principle Banker ACLEDA Bank Plc. Auditors KPMG Cambodia Ltd

3 Legend/abbreviations BfdW: DCA: DCA/YE: FLD: GD: HBF: ICCO: IDI: Mcknight: MRLG: NPA: NWO: OSI: OSJI: SADP: Wheeler: CRD: SAGE: Bread for the World DanChurchAid/Christian Aid DanChurchAid/Youth of Equality Front Line Defenders General Donation Heinrich Boll Stiftung Foundation ICCO Corporation Inclusive Development International The McKnight Foundation The Mekong Regional Land Governance Norwegian People's Aid Netherlands Organisation for Scientific Research Open Society Institute Open Society Institute- Justice Initiative Southeast Asia Development Program Planet Wheeler Foundation Civil Rights Defenders Strengthening Accountability in the Global Economy

4 Contents Page 1. Statement by the management 1 2. Report of the independent auditors 2 3. Statement of financial position 5 4. Statement of income and expenditures 6 5. Statement of cash flows 7 6. Notes to the financial statements 8

9 Statement of financial position as at 31 December 2017 Note ASSET Current assets Cash and cash equivalents 3 70, ,364 Deposits 4 174,779 3,300 Staff advances 5-5,733 Other receivables 6 3, Non-current assets 248, ,552 Property and equipment 7 5,075 8,881 Total assets 254, ,433 LIABILITIES Current liabilities Tax payables 2,566 4,488 Other payables 8 23,656 16,252 26,222 20,740 Long term liabilities Employee benefits ,059 Total liabilities 27,031 77,799 FUND BALANCE 227, ,634 Total liabilities and fund balances 254, ,433 The accompanying notes on pages 8 to 19 form an integral part of these financial statements. 5

10 Statement of income and expenditures Note INCOME Grant receipts , ,362 General donations and volunteer program 11 7,654 8,754 Other income 12 8,693 9, , ,386 EXPENDITURES Development watch program , ,637 Follow the money , ,054 Community organizing for housing rights program , ,279 Community empowerment and legal awareness program , ,374 Central office costs 17 8,422 13,822 Cambodia justice initiative ,003 Staff advance written off 19 37, , ,169 (Deficit)/excess of income over expenditure (96,446) 17,217 Fund balance at beginning of the year 324, ,417 Refunded to BfdW 20 (1,158) - Fund balance at end of the year 227, ,634 The accompanying notes on pages 8 to 19 form an integral part of these financial statements. 6

11 Statement of cash flows Note Cash flows from operating activities (Deficit)/excess of income over expenditures (96,446) 17,217 Adjustments for: Depreciation charge 7 3,806 3,806 Employee benefits 9 28,002 24,037 (64,638) 45,060 Changes in operating assets and liabilities: Staff advances 5,733 (5,733) Deposits (171,479) (300) Other receivables (3,668) (155) Tax payables (1,922) 396 Other payables 7,404 6,099 Cash (used in)/generated from operating activities (228,570) 45,367 Employee benefits paid (80,631) (9,698) Reversal on employee benefit (2,913) - Net interest earned from bank (708) 606 Net cash (used in)/generated from operating activities (312,822) 36,275 Refunded to BfdW (1,158) - Net (decrease)/increase in cash and cash equivalents (313,980) 36,275 Cash and cash equivalents at beginning of the year 384, ,089 Cash and cash equivalents at end of the year 3 70, ,364 The accompanying notes on pages 8 to 19 form an integral part of these financial statements. 7

12 Notes to the financial statements 1. General information Equitable Cambodia ( the Organisation ) was founded through the localisation of the international solidarity organisation, Bridges Across Borders Cambodia ( BABC ), and was registered as a Cambodian national non-governmental organisation in March Main Programs: The Organisation runs four different programs during the year: Development Watch: to promote a human rights approach to development by conducting monitoring, research, analysis and advocacy on the activities of major foreign business and development actors operating in Cambodia. Community Organizing for Housing Rights: to support a community organising and capacity development process in at least twenty tenure insecure urban poor communities in Phnom Penh. Community Empowerment and Legal Awareness: to provide curriculum development, training of trainer workshops, direct community training, community training and monitoring, support for community-led advocacy, democracy summer and youth training and legal internships. Follow the Money Initiative: family farmers, forest communities, fisher folks and indigenous people throughout the Mekong region are facing increasing competition for their land, water and forests from investors. National governments, striving to attract investment, are often unwilling or unable to secure and uphold tenure rights of family farmers and indigenous communities in the face of the corporate demand for land. The program provides an innovative strategy to overcome this challenge. The financial statements were approved for issue by the Board of Directors on 28 February Significant accounting policies (a) Basis of accounting The financial statements, expressed in United States dollars (), have been prepared under the historical cost convention and in accordance with the accounting policies listed below. 8

13 Notes to the financial statements (continued) 2. Significant accounting policies (continued) (b) Income The primary funds received are grants from donors, gross of bank charges, details of which are provided in Note 10 to the financial statements. General donations and Volunteer Program represent the cash collected from other individuals through bank transfers. Other income represents income from sharing office rental with a partner, car rental, and income from the disposal of assets. All income is recognised when received. (c) Expenditures Expenditures represent all costs paid to support the Organisation s set objectives and are recorded as expenses when paid rather than when incurred, except for accruals for professional fees, tax payables, employee benefits and committed expenses. The cost is allocated to each project and each donor based on approved budgets. (d) Property and equipment The cost of property and equipment amounting to 10,000 and above is capitalised as Property and equipment. The property and equipment are stated at cost less accumulated depreciation. Cost includes expenditures directly attributable to the acquisition of the item. Property and equipment items that cost less than 10,000 are recorded in the statement of income and expenditures. Property and equipment with zero net book value, which are still in use, are maintained in the property and equipment listing until they are no longer in use and are approved to be disposed of by management. The depreciation of property and equipment is calculated using the straight-line method to allocate their costs over the estimated useful lives as follows: Motor vehicles 5 years 9

14 Notes to the financial statements (continued) 2. Significant accounting policies (continued) (e) Foreign currency transactions The Organisation transacts its business and maintains its accounting records primarily in United States Dollars ( ). Transactions in currencies other than are converted into at the exchange rate prevailing on the transaction dates. Monetary assets and liabilities denominated in currencies other than are translated into at the open market rates of exchange ruling at the year-end date. Exchange differences are recognised in the statement of income and expenditures. (f) Deposits Deposits are recognised as receivables in the statement of financial position, until they have been settled. (g) Staff advances Outstanding staff advances are recorded in the statement of financial position and recognised as expenses upon liquidation. (h) Cash and cash equivalents Cash and cash equivalent comprise of cash on hand, cash at bank, and other financial assets with maturity of three months or less. (i) Other payables Other payables represent the amount outstanding for uncompleted part or unfulfilled contract made during the year. The Organisation recognises committed/contracted expenses when the invoice is received and contract is entered into and has a legal and binding contractual obligation to pay in the future regardless of when goods or services are received. The amounts stated in the invoices and contracts are agreed and at a fixed value. 10

15 Notes to the financial statements (continued) 2. Significant accounting policies (continued) (j) (i) Employee benefits Staff pension fund All employees who have completed at least three months of service participate in this pension fund. The Organisation contributes to the scheme as follows: 5% each of the employee s monthly salary for the first year of service; 6% each of the employee s monthly salary for the second year of service; 7% each of the employee s monthly salary for the third and subsequent years; The staff pension fund is invested in a bank and duly recorded in the statement of financial position; and. The staff pension fund contributions are managed by the Organisation and deposited in a separate savings accounts. The pension fund will be paid to employees upon their resignation or termination of their employment. (ii) Staff termination fund The Organisation also provides 3% of the employee s monthly gross salary to the staff termination fund and it s accrued on monthly basis. This staff termination fund is invested in a bank and duly recorded in the statement of financial position. This contribution is managed by the Organisation and deposited together with the staff pension fund in separate savings accounts. This fund will be paid to employees upon their resignation or termination of their employment. 3. Cash and cash equivalents Cash at banks Cash at bank organisation 69, ,511 Cash at bank staff benefits ,359 Cash on hand , ,364 11

16 Notes to the financial statements (continued) 4. Deposits Head office rental deposit 3,000 3,000 Community organising program office rental deposit Other deposit (*) 171, ,779 3,300 (*) This represents the Organisation s cash deposit with the Inclusive Development International ( IDI ) in accordance with the Memorandum of Understanding ( MoU ) dated 1 November Whereby IDI agrees to hold and manage funds on behalf of EC. This MoU is for a period from 1 November 2017 to 31 July 2018 unless earlier terminated as agrees by both parties and may be renewed or extended upon written agreement of authorised representatives of EC and IDI. 5. Staff advances Prior year staff advances have been paid off during the year. 6. Other receivables Receivable from donors 1,250 - Other 2, ,

17 Notes to the financial statements (continued) 7. Property and equipment Motor vehicle Cost As at 1 January/31 December 19,030 19,030 Accumulated depreciation As at 1 January (10,149) (6,343) Depreciation charge for the year (3,806) (3,806) As at 31 December (13,955) (10,149) Carrying amounts As at 31 December 5,075 8, Other payables Amounts due to IDI (*) 10,274 - Professional fee 7,000 5,335 Training 4,029 - Salary payable 1,714 1,200 Other Consultant fee 301 3,353 Printing - 3,474 Volunteer hosting expense - 2,210 23,656 16,252 (*) This presents the amounts due to IDI under The Mekong Regional Land Governance Project ( MRLG ) s fund that MRLG will transfer to IDI in subsequent period. 13

18 Notes to the financial statements (continued) 9. Employee benefits Opening balance 57,059 42,114 Pension and termination fund contributions to employees 28,002 24,037 Net interest earned from bank (*) (708) 606 Reversal on employee benefit (2,913) - Payments to employees (80,631) (9,698) Closing balance ,059 (*) This is net interest earned from bank after the deduction of bank maintenance fees and withholding tax charges. Employee benefits account: Cash at bank staff benefit (Note 3) ,359 Staff advance - 4, ,059 14

19 Notes to the financial statements (continued) 10. Grant receipts Diakonia 162, ,143 Open Society Institute 90,000 74,100 Oxfam Novib 78,538 79,459 Bread for the World 76,692 8,243 Norwegian People's Aid 66,502 48,056 The Mekong Regional Land Governance Project 61, ,000 Strengthening Accountability in the Global Economy 50,000 - DanChurchAid/Christian Aid 44,394 73,555 Netherlands Organisation for Scientific Research 39,328 30,616 The McKnight Foundation/SADP 31,538 - DanChurchAid/Youth of Equality 18,054 - Heinrich Boll Stiftung Foundation 11,862 14,850 Civil Rights Defenders 4,144 - Planet Wheeler Foundation - 219,925 Forum Syd - 30,000 ICCO Corporation - 37,097 Front Line Defenders - 3,033 Inclusive Development International 923 8, , , General donations and volunteer program General donations 7,654 8, Other income Car rental 7,040 5,600 Others 1,653 - Sharing office rental - 3,670 8,693 9,270 15

20 Notes to the financial statements (continued) 13. Development watch program Program activities costs: Meetings/workshops 55,163 39,850 Field research 11,228 34,209 International advocacy (travel) 11,070 1,746 Research and legal consultants 7,441 12,026 Program reflection and planning 4,000 2,500 Translation and interpretation Publication costs Program staff salary and benefit 140, ,482 Central office expenses 32,428 31,706 Support staff salary and benefits 14,711 20,978 Program office expenses 35,915 41, , , Follow the money Program activities costs: IDI sub-grant 43, ,959 Workshops 9,542 9,968 Vietnam case work - 15,108 Myanmar case work 3,067 5,046 Website development - 6,500 Database licenses Research consultant - 5,001 Publication posts 3,050 - Transportation, transcription and interpreter 2, Program staff salary and benefits 25,808 47,050 Program office expenses 16,773 8,693 Support staff salaries 9,156 8,010 Central office expenses 4,856 6, , ,054 16

21 Notes to the financial statements (continued) 15. Community organizing for housing rights program Program activities costs: Community support cost 37,883 48,804 World habitat day mobilisation - 2,189 Program staff salary and benefits 78,916 84,147 Central office expenses 42,405 34,767 Support staff salary and benefits 20,450 17,733 Program office expenses 18,467 12, , , Community empowerment and legal awareness program Program activities costs: Training 36,497 37,534 Curriculum development and publication 9,297 10,220 Democracy summer camp 7,146 3,531 Community advocacy and networking 5,270 2,097 Planning, monitoring and evaluation 2,076 2,145 Program staff salary and benefits 66,437 59,233 Central office expenses 27,319 31,481 Support staff salary and benefits 16,200 19,844 Program office expenses 4,277 5, , ,374 17

22 Notes to the financial statements (continued) 17. Central office costs Depreciation expenses 3,806 3,806 Volunteer hosting activity (*) 2,374 1,151 Meetings 1,457 1,349 Office equipment - 7,251 Other Travel cost ,422 13,822 (*) This expense mainly relates to the costs of materials and services fees of building latrines and water gates in province. This is one off activity of volunteers hosted by the Organisation. This activity is not part of core program of the Organisation. 18. Cambodia justice initiative Program staff salary and benefits - 12,003 Central office expenses , Staff advance written off This represents the written off of uncollectable amount due from staff that withdrawn from EC s general fund for personal use. This matter is still pending with the Municipal Court as at the date of our report. The amount has been written off following the approval by the board on 23 February Refunded to BfdW This represents the remaining fund balance from legal case under Development Watch Program which funded by Bread for the World ( BfdW ). The amount was transferred to BfdW on 17 March

23 Notes to the financial statements (continued) 21. Statement of sources and use of funds by donor BfdW DCA DCA/YE Diakonia FLD GD HBF ICCO IDI Mcknight/ SADP MRLG2 NPA NWO OSI 16 OSI 17 OSJI Oxfam Novib 1 Oxfam Novib 2 SAGE Wheeler CRD 2017 Total 2016 Total Income 76,692 44,394 18, , , ,538 61,999 66,502 39,328-90,000-56,038 22,500 50,000-4, , ,362 Grant receipts and volunteer program , ,654 8,754 Other income , ,693 9,270 76,692 44,394 18, ,635-16,347 11, ,538 61,999 66,502 39,328-90,000-56,038 22,500 50,000-4, , ,386 Expenditures Development watch program 40, ,478 3,023-12, , ,950 27,555-11,435-44,172 23,357 22,173 53, , ,637 Follow the money , , , ,054 Community organization for housing rights program 13, , ,913-37, , ,279 Community empowerment and legal awareness program 6,415 44,537 15, ,963 17,420 62, ,778 20, , ,374 Central office costs , ,422 13,822 Cambodian justice initiative ,003 Staff advance written off , ,387-60,811 44,537 15, ,389 3,023 45,790 12, ,438 46,913 95,429 59,646 30,518 17,420 73, ,172 23,357 26,951 95, , ,169 (Deficit)/excess of income over expenditures 15,881 (143) 2,199 14,246 (3,023) (29,443) (1,137) (323) (2,515) (15,375) (33,430) 6,856 8,810 (17,420) 16,175 (119) 11,866 (857) 23,049 (95,868) 4,125 (96,446) 17,217 Fund balance at beginning of the year 1,158 4,059 3,148-3,023 64,487-5,924 2,515 14,675 23,139-25,347 17, (3,059) 1, , , ,417 Refunded to BfdW (1,158) (1,158) - Fund balance at end of the year 15,881 3,916 5,347 14,246-35,044 (1,137) 5,601 - (700) (10,291) 6,856 34,157-16,175-8, ,049 65,795 4, , ,634 Represented by: Cash and cash equivalents 70, ,364 Deposit 174,779 3,300 Staff advances - 5,733 Other receivables 3, Property and equipment 5,075 8,881 Tax payable (2,566) (4,488) Other payables (23,656) (16,252) Employee benefits (809) (57,059) Total 227, ,634 The Organisation has five basket bank accounts to receive funds from various donors to carry out activities. However, if a donor specifically requires a separate bank account, there will be followed and a basket account will not be used. The Organisation does not maintain separate bank accounts or cash boxes (cash on hand) for each donor fund, but all of the Organisation s income and expenditure is analysed by donor. This means only the cumulative fund balance for each donor can be ascertained at the end of the year. 19

PRASETHPHEAP FINANCE PLC. Financial Statements for the year ended 31 December 2017 and Report of the Independent Auditors

PRASETHPHEAP FINANCE PLC. Financial Statements for the year ended 31 December 2017 and Report of the Independent Auditors Corporate Information Company Registration No 00003008 Registered office Shareholders