Annual report 2008-OK-B-up.qxp - Canadia Bank Plc.

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NOTES TO THE FINANCIAL STATEMENTS 3. CRITICAL ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGEMENTS The Bank makes estimates, assumptions and judgements that affect the reported amounts of assets and liabilities. Estimates, assumptions and judgements are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. a) Impairment losses on loans and advances The Bank follows the mandatory credit classification and provisioning as required by Prakas No. B7-00-51, dated 17 February 2000, on the classification and provisioning for bad and doubtful debts and Prakas No B7-02-145, dated 7 June 2002, on the amendment of Prakas No B7-00-51 of the Central Bank. The Central Bank requires commercial banks to classify their loan portfolio into four classes and the minimum mandatory level of specific provision is made depending on the classification concerned and regardless of the assets (except for cash) pledged as collateral. For the purpose of loan classification, the Bank takes into account historical payment experience and the borrower's financial condition. b) Investment with FTB The Bank owns 46% of the share capital of FTB. This investment is carried at cost. The Directors believe it is appropriate to carry this investment at cost as Cambodia has not adopted equity accounting standards and the Bank intents to dispose in the near future. c) Income tax Taxes are calculated on the basis of current interpretation of the tax regulations. However, these regulations are subject to periodic variation and the ultimate determination of tax expenses will be made following inspection by the Tax Department. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will have an impact on the income tax and deferred tax provisions in the year in which such determination is made. 4. CASH ON HAND 2008 2007 2008 2007 US$ US$ Riel Million Riel Million (Unaudited) (Unaudited) Cash on hand 42,825,814 27,501,166 174,772 110,087 For the purpose of the cash flow statement, cash and cash equivalents comprise of: 2008 2007 2008 2007 US$ US$ Riel Million Riel Million (Unaudited) (Unaudited) Cash on hand (as above) 42,825,814 27,501,166 174,772 110,087 Balances with Central Bank: Current accounts 5,090,531 8,601,000 20,775 34,430 Term deposits (maturity less then 3 months) 5,500,000 25,000,000 22,446 100,075 Overdraft (3,105,467) - (12,673) - Balances with other banks - current accounts 27,320,602 78,785,657 111,495 315,379 77,631,480 139,887,823 316,815 559,971 Annual Report 2008 37
NOTES TO THE FINANCIAL STATEMENTS 5. BALANCES WITH THE CENTRAL BANK 2008 2007 2008 2007 US$ US$ Riel Million Riel Million (Unaudited) (Unaudited) Balances with the Central Bank: Current accounts 5,090,531 8,601,000 20,775 34,430 Term deposits 5,500,000 25,000,000 22,446 100,075 Statutory deposit 4,054,500 4,054,500 16,546 16,230 Reserve deposits 57,401,225 33,401,249 234,254 133,705 Balances with the Central Bank 72,046,256 71,056,749 294,021 284,440 (a) Reserve account The reserve account represents the minimum reserve requirement which is calculated at 8% for Khmer Riel and 16% for other currencies (2007: 8%) of the total amount due to customers and other banks and borrowings. On 26 January 2009, the Central Bank dropped the reserve rate to 12% for other currencies than Riel. (b) Statutory deposit Under Prakas No. B7-01-136 on Bank's Capital Guarantee dated 15 October 2001, banks are required to maintain a statutory deposit of 10% of paid-up capital. This deposit is refundable should the Bank voluntarily cease its operations in Cambodia and it is not available for use in the Bank's day-to-day operations. (c) Interest rates Current accounts and reserves deposits are non-interest bearing. Annual interest rates on other balances with the Central Bank are summarised as follows: 2008 2007 Term deposits 1.05% - 3.07% 4.00% - 4.19% Statutory deposit 1.18% - 1.77% 3.00% 6. BALANCES WITH OTHER BANKS 2008 2007 2008 2007 US$ US$ Riel Million Riel Million (Unaudited) (Unaudited) 38 Local banks: Current accounts 610,388 740,863 2,491 2,966 Overseas banks: Current accounts 27,674,632 78,984,913 112,940 316,176 Fixed deposits 500,000 1,000,000 2,041 4,003 28,785,020 80,725,776 117,472 323,145 Included in the balances with other banks are trust deposits for Visa Card and Master Card operations amounting to US$430,996 (2007: US$418,816) and US$533,422 (2007: US$521,302) respectively. The deposits are not available for the Bank's day-to-day operations. Current accounts with other local banks are non-interest bearing. Current accounts with overseas banks earn interest at rates ranging from 0% to 4.52% (2007: 0% to 5.21%). Fixed deposits earn interest at 5% per annum (2007: 5% per annum). Annual Report 2008
Page 1 and 2: Annual Report 2008 64
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Page 5 and 6: CEO 4
Page 7 and 8: PRESIDENT’S AND CEO'S REPORT Dist
Page 9 and 10: VISION To be a premier and a well-r
Page 11 and 12: FIVE YEARS FINANCIAL REVIEW Total a
Page 13 and 14: RISK MANAGEMENT Being fully aware o
Page 15 and 16: BAD AND DOUBTFUL LOANS Before the f
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Page 25 and 26: INCOME STATEMENT FOR THE YEAR ENDED
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Page 31 and 32: CASH FLOW STATEMENT FOR THE YEAR EN
Page 33 and 34: 32 NOTES TO THE FINANCIAL STATEMENT
Page 35 and 36: 34 NOTES TO THE FINANCIAL STATEMENT
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Page 41 and 42: NOTES TO THE FINANCIAL STATEMENTS 7
Page 73 and 74: Sihanouk Ville Independent Blvd., S
Page 75: Sovanna # 307-309, St. 271, Sangkat

Annual report 2008-OK-B-up.qxp - Canadia Bank Plc.

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