Vision Fund

CONTENTSABOUT US5 Vision, Mission and Core Values6 Corporate Profile7 An Institution of International Excellence8 A Note from VisionFund International10 Message from CEO and Chairperson14 Board of Directors Profile18 Executive Team Profile21 Key Figures22 Organizational Chart24 Client Story26 Product Profile28 Our PartnersSOCIAL IMPACT34 Initiatives to Improve Social Performance39 Client Story40 Environmental and Employment Dataat a Glance41 Areas of OperationFINANCIAL44 Growth Trend47 Extracted Report of the Independent Auditors48 Balance Sheet49 Income Statement50 Statement of Changes in Equity51 Statement of Cash Flows52 VisionFund Global2 VISIONFUND CAMBODIA ANNUAL REPORT 2012

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ABOUT USMESSAGE FROMSCOTT BROWNPRESIDENT ANDCEO, VISIONFUNDINTERNATIONALVisionFund Cambodia completedanother outstanding financialyear of sustainable growth. Ourmicrofinance institution (MFI)ended FY12 with a loan portfolio ofUS US$48 million. This demonstrates aremarkable increase of 27 percentfrom FY11. Client numbers have alsogrown by 19 percent, reachingover 156,000 borrowers, 93 percentof whom are women. In this fiscalyear, we made positive changes tothe lives OF ABOUT 530,000 childrenliving in Cambodia.530THOUSANDCHILDREN IMPACTED8 VISIONFUND CAMBODIA ANNUAL REPORT 2012

VisionFund Cambodia is an affiliated microfinanceinstitution of VisionFund International. In 2011, weannounced our global strategy to improve the livesof 3.5 million children every year by 2015, helping toliberate them from poverty. VisionFund Cambodia hasbeen recognised as one of the best among its fellowMFIs worldwide. The figures outlined above show howVisionFund Cambodia has flourished and how it hascommitted itself to undergo our mission.Throughout financial year 2012, VisionFund Cambodiahas adhered to its core values of serving the poorthrough effective working systems, innovative servicesand products and strong leadership. VisionFundCambodia’s active social performances have beenrecognised by many independent rating agencies,including MIX Market, where it won a platinum awardfor social performance reporting.VisionFund International has much to be thankfulfor in FY13. 2013 marks the beginning of our tenthyear anniversary. World Vision established VisionFundInternational in 2003 to manage and govern its networkof affiliated MFIs. Since then, we have worked faithfullyas World Vision’s microfinance ministry to fulfill ourshared vision that each child should experience life inall its fullness.Over the last ten years, we have dispersed 6.6 millionloans and lent over US$ 3.5 billion to some of theworld’s most vulnerable people, helping them to buildmore secure futures for their children.Today, VisionFund International operates 36 MFIsaround the world, with a collective loan portfolio of US$419 million (FY12 figures). We congratulate VisionFundCambodia on its outstanding accomplishments andcontribution towards our global success.We are thankful to all local and international partnersand stakeholders for supporting us in bringingsustainable improvements for local communities.Sincerely,Scott BrownPresident & CEO, VisionFundInternationalVISIONFUND CAMBODIA ANNUAL REPORT 2012 9

ABOUT USA MESSAGEFROMVISIONFUNDCAMBODIACEO &CHAIRPERSONThe impressive result that VisionFundCambodia has churned out for yetanother year goes to show that itsadopted strategy of maintainingmoderate portfolio growth withpriority on quality and depthcan be effective in enhancing itsfinancial and social performancedespite an increasingly competitiveenvironment. This has come aboutwith the strong dedicationand hard work of its staff andmanagement and continuousimprovement in its operations andcontrols.93%WOMEN CLIENT10 VISIONFUND CAMBODIA ANNUAL REPORT 2012

Client outreach also recorded impressive growth from132,000 clients to 156,000 clients, bringing impactto more than 500,000 children. In the process wemanaged to contain the average loan size to a low$306, an annual increase of only 7% compared todouble-digit increase in the industry. This reaffirms ourcommitment to serve the lower income segment andthe underserved in Cambodia. In total, we served 118districts in 20 provinces throughout Cambodia as atDecember 2012.VisionFund Cambodia’s growth has been accompaniedby good loans quality, where the loan portfolio atrisk (PAR>30 days) has been maintained at a low of0.26%. Apart from exercising prudent lending policiesand credit-underwriting discipline, we have also fullysubscribed to the credit check facility provided by theCredit Bureau of Cambodia even though additionalcosts had to be incurred by us. On the field, we are wellengaged with our customers, providing them financialeducation to better manage their household incomesand expenses, including their loan repayment.2012 also saw the full launch of VisionFund Cambodia’snew logo in line with VisionFund International’s efforttowards a standard brand identity amongst its wideglobal network of MFIs in over 35 countries. The neworange-color logo clearly reflects the relationshipbetween VisionFund and its parent organization WorldVision, and serves to reinforce its common vision tosee fullness of life for every child.FINANCIAL PERFORMANCEVisionFund Cambodia’s net profit grew from US$1,78million in 2011 to US$2.41 million in 2012, maintainingfinancial self-sufficiency ratio at the rate of 112%,attributed to the quality loan growth, and propermanagement of financial cost and operating costthrough higher productivity. The return on assetsreached a healthy 4.5%. Assets grew from US$44.24million to US$55.34 million with equity amounting toUS$15.85 million in 2012. The asset growth was largelycontributed by portfolio growth of 27%, from totalloans of US$37.71 million to US$48.02 million.VISIONFUND CAMBODIA ANNUAL REPORT 2012 11

ABOUT USBOARDMEMBERSMS. ESTHER HALIMCHAIRPERSON, VISIONFUNDCAMBODIA AND HR DIRECTOR OFWORLD VISION myanmar(BASED IN MYANMAR)Ms. Halim an Indonesian citizen, iscurrently an HR Director of WorldVision Myanmar and has more than 30years of experience, she has primarilyfocused her attention on emergency/relief services, communications, sponsorrelations, national resource development,human resource development, andadministration in Indonesia and theSouth East Asia/Pacific Region. Beforejoining World Vision Myanmar, she wasNational Director of World VisionCambodia from 2006 to 2012. She hasbeen with World Vision since 1992.Ms. Halim was born in Indonesiaand completed Master of BusinessAdministration at the Institutefor Management Education andDevelopment, Indonesia in 1993 and inmedicine at Atmjaja Catholic University,MR. CHEE CHIN HOEBOARD MEMBER AND CHIEFEXECUTIVE OFFICERA Malaysian citizen, Mr. Chee joinedVisionFund (Cambodia) as CEO inFebruary 2010. Prior to this, his last-heldposition was Head (Vice President) ofCredit Support and Administration witha leading commercial bank in Malaysia.He has more than 33 years of bankingexperience. Having risen through theranks during his tenure with two differentcommercial banks, he has extensiveworking experience in both credit andbanking operations. He has served invarious managerial and leadership rolesat branch, regional, and head office levels.Mr. Chee has also been active in socialdevelopment activities providing variousfamily-oriented courses to youths, premaritalcouples, married couples andparents. His experience also includestraining of trainers.He is a certified Credit Professionalunder the Institute of Bankers Malaysia,and he has completed his postgraduatestudies in Business Administration.14 VISIONFUND CAMBODIA ANNUAL REPORT 2012

MR. JONATHAN HARTLEYBA (HONS), FCA, ACA, FAICD BOARDMEMBER AND VFI DIRECTOR(BASED IN NEW ZEALAND)Mr. Hartley, a British and Australiancitizen, joined VisionFund Cambodia in2005. He has many years of experienceincluding general management, mergerand acquisition transactions, valuations,strategy and planning work, finance,business initiation and banking. He hasworked in several countries and holdsboth British and Australian citizenship.He graduated from Newcastle uponTyne University in England, majoringin Economics and Accounting. He iscurrently a director of several companiesin New Zealand.MR. ROMMEL CARINGAL MS. NOP VANTHYBoard Member, and VFIproduct director(based in kenya)Mr. Caringal , a Filipino citizen, hasbeen working in the microenterprise/microfinance sector for more than20 years, in areas such as organizationmanagement, product and servicesdevelopment, human resourcedevelopment, management informationsystems, fisheries, indigenous peoples,urban poor development, and reliefand emergency programming. Prior totaking up his current position as ProductDirector of VisionFund International(VFI), Mr. Caringal was serving as theRegional Director of VFI for the AsiaPacific Region. He also sits on the boardof several MFIs and non-profit NGOs inAsia. and is on the board of several MFIsand non-profit NGOs in Asia.EXECUTIVE ADVISOR OF WORLDVISION CAMBODIAA Cambodian citizen, Ms. Vanthy joinedVisionFund Cambodia in 2004 withmore than 16 years of work experiencein community development with achild focus approach, including workingfor a street children program. Shealso has experience in operations andstaff management, urban development,agriculture and health development,administration, human resource,and program design/monitoring andevaluation.. She had also served asBoard and Executive Committeemembers for several NGOs. She holdsa Master of Agriculture Science Degreefrom VasilKolarov Agriculture Institutein Bulgaria.VISIONFUND CAMBODIA ANNUAL REPORT 2012 15

ABOUT USMR. CHEONG CHIN KUANBOARD MEMBER(BASED IN MALAYSIA)Mr. Cheong, a Malaysian citizen, hasmore than three decades of extensivecommercial and consumer bankingexperiences gained through his tenurewith two leading commercial banks. Inhis banking career, he rose to the rankof Country Head, Consumer Bankingfor a leading foreign bank in Malaysia.By choice, he decided to go back to theless developed part of Malaysia (EastMalaysia) and took up a regional positionwhere he could devote more time tohelp the local community especiallystudents.Mr. Cheong graduated with a Bachelor ofEconomics from the University of Malayamajoring in Business Administration andcompleted other academic programmessuch as Associate Institute of BankersMalaysia; the Executive Programme,Darden School of Business, Universityof Virginia, USA (1993); Visa BusinessSchool, Cambridge University, UK(2002); and Financial Planner, FPAM(2003). He is also a Senior Associatewith the Institute of Bankers Malaysia.DR. KEVIN LOWEBOARD MEMBER(BASED IN CAMBODIA)(Appointed on 10 Jan 2013)Dr. Lowe, a Singaporean citizen, has beenworking for Forever Living ProductsCambodia Ltd as a Country Managersince 2008 distributing health and beautyproducts through network marketing.He also has a joint venture with Worldof Sports Singapore Ltd in Cambodiafrom 2011 importing, distributing andselling sports goods. An ordainedminister since 1994, he was serving asCountry Coordinator for the MethodistMission Society of the MethodistChurch in Singapore pioneering churchand social work in Cambodia since 1998.He holds a diploma in Business Studiesand several theological degrees fromSingapore, the UK and the USA.16 VISIONFUND CAMBODIA ANNUAL REPORT 2012

MS. FIONA WHYTEBOARD MEMBER(BASED IN NEW ZEALAND)(Appointed on 10 Jan 2013)Ms. Whyte, a New Zealand citizen,volunteered through the “Bankers withVision” programme for VisionFundCambodia. She has 23 years bankingexperience in New Zealand, 12 yearsin Foreign Exchange Risk Management.She set up and managed teams in thearea of Vanilla Foreign Exchange andBusiness Development. Fiona studiedInternational Business and Managementat Massey University (2007). Morerecently she works with a number ofsmall businesses in NZ assisting themwith tax debt negotiation and cashflow management. She is also one ofthe conveners for the NZ Instituteof Chartered Accountants BusinessDevelopment Special Interest Group.Fiona also facilitates CAP Moneybudgeting courses in Auckland, NZ.MR. CHRISTOPHER BRYANBOARD MEMBER(BASED IN NEW ZEALAND)(Appointed on 10 Jan 2013)Mr. Bryan, a New Zealand citizen,has a Lincoln University degree andan agribusiness background, withexperience in rural finance, farmmanagement, corporate and marketdevelopment, exporting and businessplanning. His work included seniormanagement roles in the stock andstation, meat and deer industries, exportmarketing and investment businesses.As a member of the NZ Prime Minister’sAdvisory Group, for nearly three years,he advised two Prime Ministers onmatters related to the primary sector.While owning and operating a smallagribusiness consultancy in the 90’s, healso developed a deer farm in Motueka,New Zealand.Mr. Bryan is fully competent in allaspects of leadership through staffmanagement, planning, compliance andfinancial reporting disciplines. He isdirector and sits on the board of severalcompanies and community/charitableorganizations in New Zealand andoffshore, and primarily focuses on goodgovernance. He also manages a numberof investments in property, equities andSME’s.VISIONFUND CAMBODIA ANNUAL REPORT 2012 17

ABOUT USexecutive teamCHEE CHIN HOEBoard Member and Chief ExecutiveOfficerA Malaysian citizen, Mr. Chee joined VisionFundCambodia as CEO in February 2010. Prior to this, hislast-held position was Head (Vice President) of CreditSupport and Administration with a leading commercialbank in Malaysia.Mr. Chee has more than 33 years of banking experience.Having risen from the ranks during his tenure with twodifferent commercial banks, he has extensive workingexperience in both credit and banking operations. Hehas served in various managerial and leadership rolesat branch, regional as well as head office levels.see more on Board Member page14TOP SOK SAMPHEAChief Operating OfficerMs. Samphea has been in the current position since2008, after joining VisionFund Cambodia as finance andadministration director in 2002. Prior to this, her lastposition was a senior auditor of Ernst & Young andPrice Waterhouse Coopers.Ms. Samphea, born in Phnom Penh, has more thana decade of experience in finance, accounting,management, business plans and strategies, auditing,administration and communications.She has a bachelor degree and master’s degree inBusiness Administration from the National Universityof Management, Cambodia. She also possesses adiploma of Accounting and Administration from NoisyLe Grand College, France.18 VISIONFUND CAMBODIA ANNUAL REPORT 2012

CHANN SAVOEUNGChief FinancIAL OfficerMr. Savoeung has more than five years of experiencein Microfinance sector as Finance Manager/ChiefFinancial Officer with VisionFund Cambodia and hispast experiences for more than 7 years were withthe local and international NGOs as Finance andAdministrative Manager, Logistic Manager, ProjectManager and Capacity Building Coordinator.For over 7 years, he has been in the management andleadership positions which allowed him to exerciseat the leadership and strategic level. In addition to hiscurrent position, he has contributed his time and talentvoluntarily by serving as the chairman and memberof the board of director to 4 local organizations inCambodia. His passion and competence are exceptionalin both social and business development works.Savoeung holds Master of Business Developmentand Innovative from Lyon II University (partnershipwith RULE), and Bachelor in Accounting from localuniversity. He attended enormous training courseslocally and internationally related to businessmanagement, financial management, strategic planningand risk management etc.PREAP PISETHSenior Operations ManagerMr. Piseth, born in Kandal province, has more thana decade of experience in development, customerservices and sponsorship management, leadershipand management, and public communication andadministration. His career with VisionFund Cambodiastarted in 2008. He previously spent a large part ofhis occupational history at World Vision Cambodiaand the Secretariat for Public Functions of the RoyalGovernment of Cambodia.Mr. Piseth has a Master’s Degree in BusinessAdministration from Norton University, Cambodia.He also holds a Bachelor Degree of Economics inEnterprise Management and an Associate Degree inProfessional Law from the Royal University of Law andEconomics (RULE), Cambodia.VISIONFUND CAMBODIA ANNUAL REPORT 2012 19

ABOUT USKHUON SOPHORTHHead of Systems and CommunicationsMr. Sophorth returned to VisionFund Cambodia to takeup his current position in late 2008, nearly a year afterhe left the institution to join World Vision Internationalas technical specialist in banking applications.He originally joined VisionFund Cambodia as ITManager in 2005 after spending approximately fiveyears of employment for several commercial and socialenterprises.Mr. Sophorth is currently pursuing a Master’s Degree inBusiness Administration from Pannasastra University inCambodia, and holds a Bachelor Degree in ComputerScience and Engineering from the Royal University ofPhnom Penh, Cambodia.He has numerous certificates of training at home andabroad including the Global Banking System Training inToronto, Canada and the Banking System Automationin London, England.CHHAN AND HIS BROTHER, SONS OFOUR BEST CLIENT IN SIEM REAP, AREHOLDING A SCHOLARSHIP BOARDPROVIDED BY VISIONFUND CAMBODIA.46 children of our clients have received annualcash worth amounted to US$100, some amountof which is for buying school materials while theremaining amount is kept as children’s savingsuntil the completion of their high school.20 VISIONFUND CAMBODIA ANNUAL REPORT 2012

KEY FIGURESDecember 2012 December 2011Number of Active borrowers 156,742 132,036% of women borrowers 93% 92%Number of Provincial branch office 13 11Number of Districts covered 118 108Total Staff 820 700Loan Portfolio $48,025,552 $37,719,086Average portfolio per borrower $306 $286Average portfolio per Client Service Officer $118,582 $109,331Portfolio at risk > 30 days 0.26% 0.14%Total Assets $55,342,557 $44,236,309Total Equity $15,854,614 $12,212,770Operational Self-Sufficiency (OSS) 119% 119%Financial Self-Sufficiency (FSS) 112% 112%Return on Assets (ROA) 4.54% 4.23%LOANS METHODOLOGIESBY CLIENT NUMBERLOANS METHODOLOGIESBY PORTFOLIO SIZESolidarity Group 8% Individual Lending 8%Community Bank 45%Solidarity Group 12%Individual Lending 43%Community Bank 84%VISIONFUND CAMBODIA ANNUAL REPORT 2012 21

ABOUT USORGANIZATIONALCHARTBOARD OFDIRECTORSCHIEF EXECUTIVEOFFICEREXECUTIVE TEAMSOCIALPERFORMANCECOMMITTEEPRODUCT & PRICINGCOMMITTEEMIS COMMITTEEFINANCE DEPTFinance ManagerPEOPLE &CULTURE DEPTPeople & CultureManager (OIC)SYSTEMS & COMM.DEPTHead of System &CommunicationsIT DEPTIT ManagerRISK & QUALITYASSURANCE UNITRisk & QualityAssurance ManagerPEOPLE &CULTURE UNITP&C Uint ManagerMARKETING&COMM. UNITMarketing & Comm.CoordinatorBUSINESS INFOSERVICES UNITDeputy IT ManagerTREASURY UNITTreasury ManagerLEARNING& DEV’TUNITLearning & Dev’tManagerCREATIVESERVICES UNITCreative ServicesManagerTECHNOLOGY &INFRA. UNITTechnologyInfrastructure MgrADMIN DEPTAdministrative Mgr22 VISIONFUND CAMBODIA ANNUAL REPORT 2012

B.GOVERNANCE,NOMINATING & HRCOMMITTEEBOARD RISKCOMMITTEEBOARD AUDITCOMMITTEEASSET & LIABILITYMGT.COMMITTEERISK MANAGEMENTCOMMITTEECORP.SECRETARIAL &COMPLIANCE DEPTCorp. Secretarial &Compliance ManagerOPERATIONSDEPTSr. Operations MgrBUSINESS DEV’TDEPTBusiness Dev’t MgrINTERNAL AUDIT &EVALUATION DEPTInternal Audit & Eva.ManagerREGIONALRegional ManagerSOCIAL PERF.&INTEGRATIONUNITSocial Perf. &Integration ManagerCREDIT &RECOVERY DEPTCredit & RecoveryManagerBRANCHESSAVINGS UNITSavings CoordinatorVISIONFUND CAMBODIA ANNUAL REPORT 2012 23

CLIENT STORYThe loan fromVisionFund is like agift which couldbring positivechange for ourliving.Kit Sochea, 43 years old, is a residentof Banteay Meanchey Provincewhere she lives with her husbandand her four children. Socheaand her husband are now runningtheir small business of carvingstone statues.Looking back to the years before receiving loansfrom VisionFund, the couple was living in a wreckedold house with leaking roof and broken walls.24 VISIONFUND CAMBODIA ANNUAL REPORT 2012

‘I don’t want to recall of my past. It was so miserable for us.We worked so hard but we earned very little,’ said Sochea.The whole family depended solely on her husband’smeager income of only US$2.5 a day earned fromdoing house construction labor work. At the end ofeach tiring day, the couple would still need to go fishingfor their food which didn’t cost money. Due to the lowstandard of living, the couple earned extra income bytransporting drinking water far from the village. Theycould earn only 500 riels (about US$0.12) for everytwo containers they transport.Her fortune turned for the better in 2009 when shemet one of the staff of VisionFund. She decided toget her first loan of US$75 to start off a stone statuecarving business. This small loan was used to buymaterials needed such as carving motor and stones. Byher husband’s skill and commitment, Sochea’s businessprospered to become the only supplier of carvedstone- statues in the village. As Sochea could save upto US$100 per month, she could pay off the first loanbefore the loan maturity. Subsequently, more loanswere taken to facilitate the needs of her expandingbusiness.Sochea has now been using the loan for 3 cycles andshe was selected as one of VisionFund Best Clients in2012 for using the loan for the right purpose. Socheaand her family are now living in a new house withenough food to eat, a new motorbike, and properclothing.“I am very happy that now our lives are much better thanbefore. Our children are also able to go to school regularlywith full stomach and well dressed. I expect the business togrow bigger by carving more valuable and larger statues. Iwant to send my children for higher education and I hopethat they will work for VisionFund as well.”VISIONFUND CAMBODIA ANNUAL REPORT 2012 25

ABOUT USPRODUCTPROFILETHREE LENDINGMETHODOLOGIESVisionFund Cambodia served morethan 156,000 families with a loanportfolio of US$48 million as of 31December 2012. Loans are offeredusing three lending methodologies.1- Community BankThis loan provides financial services for poor microentrepreneurs,builds civil society and strengthenscommunity participation.Loan Size: KHR 80,000 to KHR1,400,000THB 8,001 to THB 14,000Term: 3 months to 12 months2- Solidarity GroupSolidarity group loans are intended to meet greatercustomer needs, maintain high retention rates andprovide portfolio growth for institutional sustainability.Loan Size: KHR 600,100 to KHR 4,000,000US$151 to US$1,000THB 6,001 to THB 40,000Term: 3 months to 24 months3- Individual LendingIndividual lending focuses on small and medium scaledentrepreneurs creating assets or who are in need ofworking capital.Loan Size: US$1,001 to US$10,000Term: 3 months to 30 monthsMOBILE MONEYTRANSFER SERVICEVisionFund Cambodia incorporatedmobile money transfer, with cashin/out service counters, into itsfinancial services in January 2009 inpartnership with WING Cambodia,then a subsidiary of Australia andNew Zealand Banking (ANZ) Group.The money transfer service made VisionFund the firstmicrofinance institution in Cambodia to deliver sucha service. Rural clients and unbanked residents arenow able to access financial services conveniently andat affordable cost. The easy access and conveniencein transaction encourages and stimulates savings.To subscribe to the mobile money transfer service,a client opens a WING account at any WING’sappointed agents. With the account, the client can send,save and receive money through their mobile phone.Transactions are cashed at WING’s Cash Expressagents nationwide and also at most of VisionFundCambodia counters.26 VISIONFUND CAMBODIA ANNUAL REPORT 2012

SAVINGSVisionFund Cambodia was grantedMDI (Microfinance Deposit Taking)license from the National Bank ofCambodia in February 2011. Soon afterthe license was officially grantedin April 2011, VisionFund Cambodiabegan collecting deposits from thepublic.Currently, more than 500 customers are being servedwith approximately US$1.7 million in savings balance.The development of savings aims to reach bothsurplus income generators who are willing to help thecommunity through VisionFund Cambodia and to thepoor in case of emergency or unpredictable events.Social Investor Term Deposit was introduced to attractsocial investors who are willing to join VisionFund tohelp the poor community move out of poverty.INTER BRANCHMONEY TRANSFERIn response to the need of community, VisionFundCambodia launched its Inter Branch money transfer(IBT) service in July 2010 as a supplementary financialservice to its credit service VisionFund Cambodia’sIBT service provides a safe and convenient servicewith affordable price across its branch networksin Cambodia. Through this facility, clients are ableto transfer money quickly to recipients in farawaylocations through the branches of VisionFundCambodia.27VISIONFUND CAMBODIA ANNUAL REPORT 2012 27

ABOUT USOURPARTNERSBelieving that financial servicesalone are not the only toolfor economic development andpoverty alleviation, VisionFundCambodia adopts a synergisticapproach to partner withdevelopment NGOs and other likemindedinstitutions to leverageon its strengths of deliveringfinancial services alongside thepartners’ non-financial services.This approach leads to greateroutreach and social impact,positioning VisionFund Cambodiaa a unique and highly competitivemicrofinance institution with aclear strategic intent for povertyalleviation.156THOUSANDACTIVE BORROWERS28 VISIONFUND CAMBODIA ANNUAL REPORT 2012

World Vision Cambodia (WVC) is an internationalChristian relief and development organization workingto promote the well-being of all people – especiallychildren. World Vision seeks to serve people who arepoor worldwide, regardless of race, religion, or ethnicorigin. VisionFund Cambodia has been working inclose strategic partnership with WVC since the 1990’s.VisionFund Cambodia delivers financial services, whileat the same time WVC Area Development Programs(ADPs) manage social safety programs and/or projects,such as food and water security, education, health,peace and justice, and HIV/AIDS. We currently have20,473 clients (US$7.23 million portfolio), who arethe beneficiaries of WVC and who used the loan forvarious income generating activities to improve thelives of their children and families.The International Labour Organization (ILO) has,since 2007, maintained partnership with VisionFundCambodia through a local NGO partner known asHealth Centre for Children (HCC) with an aim tohelp families whose children are at risk of becomingchild labourers instead of being in school. VisionFundCambodia offers micro loans in Phnom Penh areaswhere the HCC operates. ILO has also supported usin developing a financial education program for ourclients.Hagar is an international Christian organizationdedicated to the recovery of extreme human rightsabuses, particularly human trafficking, gender-basedviolence, and sexual exploitation. Hagar and VisionFundCambodia began to integrate microfinance anddevelopment projects into the Tapreach community inKampong Thom in March 2008 to help disadvantagedwomen achieve financial independence.Plan is a child-focused development NGO thatpromotes child rights to end child poverty. Ourpartnership with Plan International Cambodia datesback to 2007, starting in Kampong Cham province andlater extending to Siem Reap province. The partnershipbenefited the poor and the most vulnerable poor,especially women living in Plan’s target areas wherethey could access the financial services from VisionFundCambodia to start up and or/ expand their smallbusiness and or/ increase their agricultural productionto eventually improve their living condition. There havecurrently been 5,763 clients with a total loan portfolioof US$1,68 million. The loan size is averaged at US$293,which means VisionFund Cambodia maintains a strongfocus on targeting low-income clients or the poorestsegment of the rural population.WING, then a subsidiary of Australia New ZealandBanking Group (ANZ), is a mobile payment providerthat offers money transferring service to its customerswithin Cambodia. In partnership with WING, VisionFundlaunched mobile phone money transfer services inJanuary 2009, making VisionFund the country’s firstMFI to deliver such a service, which extends accessof financial services to rural Cambodians allowing unbankedindividuals to save money, transfer, and makepayments conveniently and inexpensively.Cambodian Center for Study and Development inAgriculture (CEDAC) is a local NGO that envisionsa Cambodian society where small farming householdsVISIONFUND CAMBODIA ANNUAL REPORT 2012 29

ABOUT USenjoy good living conditions and strong mutualcooperation, with the right and power to determinetheir own destiny, as well as playing an importantrole in supplying healthy food for the whole society.The partnership between CEDAC and VisionFundCambodia started in 2009 to provide farmers enoughcapital to increase their farming and agriculturalprocess through the purchase of necessary agriculturalequipment. By 2012, VisionFund has provided loansbenefiting 602 households.PATH is an international non-profit organization thattransforms global health through innovation. PATHtakes an entrepreneurial approach to developingand delivering high-impact, low-cost solutions, fromlifesaving vaccines and devices to collaborativeprograms with communities. PATH has collaboratedwith Hydrologic Social Enterprise to partner withVisionFund Cambodia since early 2011 to first pilotwater purifier program in Kompong Speu to promotewater and sanitation hygiene. The pilot proved quitesuccessful and was later scaled up throughoutKompong Speu and other provinces, such as Kandal,Takeo and Kompong Cham, even in closer partnershipwith VisionFund Cambodia. We’ve currently had 12,644clients (US$293,061 portfolio) who used the loan topurchase water purifiers/ filters.In early 2012, we started to pilot another new relatedsanitation financing product (for latrines) in Kandalprovince in a tripartite partnership between PATH, iDEand VisionFund Cambodia to promote basic hygieneand sanitation. Overall, we’ve currently had 1,658clients with a total loan portfolio of US$108,898.iDE (International Development Enterprise) focuseson developing market systems to serve the needs ofthe poor in developing countries. For more than eightyears in Cambodia, Vietnam, Timor Leste, Laos, andnow in Nepal and Bangladesh, iDE has been a pioneerin the application of market-based approaches toimprove household water treatment, sanitation andhand washing (WASH) in rural areas. iDE’s approachexploits the comparative advantages of the privatesector,government, and NGOs to reach large numbersof poor households in short timeframes.ISS (International Solar Solutions) offers a wide rangeof turnkey solar products, such as solar panel, electricalcharge controllers, batteries and inverters from variousinternational brands including Mitsubishi, Showa Shell(Japan), German Solar and Sun Power (USA). VisionFundCambodia has launched a new social product called“solar energy loan” in partnership with ISS. We offerloan to clients to purchase solar kits for home lightingas part of promoting child education at night andcontributing to the reduction of global greenhouseeffect. Solar Energy Loan product was pioneeredlaunched in Kampong Thom in 2011 and currently hasabout 31 clients, with a US$4,843 portfolio.Following in the footsteps of iDE’s long traditionof expertise and know-how, Hydrologic today isan independent legal entity and social enterprisedelivering safe drinking water to more than half amillion Cambodian people through the well-knownTunsai CWP. In order to tackle the poor drinkingwater conditions in rural areas, Tunsai (rabbit) ceramicwater purifier (CWP) was introduced by InternationalDevelopment Enterprises (iDE) in 2001.ADRA (Adventist Development & Relief Agency)focuses primarily on sustainable, long term developmentprojects with the rural poor and with populations thatare at risk. ADRA assists those in needs without regardto ethnic, political or religious affiliation.Since early 2010 VisionFund Cambodia and ADRAhas been partnering in Phnom Kravanh District,Pursat Province. ADRA’s beneficiaries borrowedfrom VisionFund Cambodia mainly for agriculturalproduction and for starting or expanding their smallbusinesses. There are currently 662 clients with a totalloan portfolio of US$184,512.30 VISIONFUND CAMBODIA ANNUAL REPORT 2012

WaterSHED Cambodia is a local NGO that facilitatesaccess to affordable and desirable water and sanitationproducts that increase adoption and proper use amongthe rural poor. Using proven, market-based principles,WaterSHED leverages the power of private enterpriseto bring water, health and prosperity to the people ofSoutheast Asia. WaterSHED entered a collaborativepartnership with VisionFund Cambodia in mid-2012 todisburse sanitation financing loan to enable the ruralpoor to buy latrines in selected areas.Oxfam Great Britain is a humanitarian and developmentorganization with 70 years of worldwideexperience in community development. In late 2012,Oxfam Great Britain partnered with VisionFundCambodia to handle a cash-for-work project for thevictims of the 2011 floods in Kompong Thom province.A cash-for-work donation was handed by VisionFundfield staff as contracted with the Oxfam Great Britainfor the cash delivery service for 2,000 households.Each household received 24,300 Riels (US$6.075).Kiva is a non-profit organization with a mission toconnect people through lending to alleviate poverty.Leveraging the internet and a worldwide network ofmicrofinance institutions, Kiva lets individuals lendas little as US$25 to help create opportunity aroundthe world. VisionFund Cambodia first became Kiva’sfield partner in September 2011 with a pilot statusrolling out in only 2 provinces and then was upgradedto active status in April 2012 which has enabledVisionFund Cambodia to expand this partnershipfor six provinces. With its strong social mission andremarkable works, VisionFund Cambodia was grantedfive social performance badges out of a total of sevenbadges for its anti-poverty focus, client voice, family andcommunity empowerment, facilitation of saving, andinnovation and also is approved to post three differentloan schemes - Regular Loan, Higher Educationand Water Loan scheme - on the Kiva website forfundraising.PKMI is the first and only licensed micro-insurer inCambodia. It is a subsidiary of Groupe PREVOIR,French Insurance Company, over 100 years expertise inhealth and life. PKMI’s primary strategic focus is Microinsurancefor low income earners. Our partnershipwith PKMI started in November 2012. This partnershipbuilds a mutual benefit providing our clients withsimple, low-cost, quality insurance solutions. Throughthis insurance service, it will help to secure the incomesof the community households by limiting the economicconsequences of large health expenditures (illness,accidents) and encourage these household’s access toappropriate quality health care.Vittana Foundation, a Washington non-profitcorporation with a mission of envisioning a world ofopportunity, where educated minds and skillful handswork together to uplift the next generation, breakingthe cycle of poverty. VisionFund Cambodia haspartnered with Vittana Foundation since November2012 to provide credit for youth education to accessvocational skills training and higher education. VittanaFoundation has provided VisionFund Cambodia freeconsultancy service and technical assistance to roll outthe education loan by working with various technicalschools and universities. VisionFund Cambodia has thusfar had scores of clients, who use the loan to attenduniversities for various academic degrees.VISIONFUND CAMBODIA ANNUAL REPORT 2012 31

SOCIAL IMPACTVisionFund Cambodia has continuedto work with strategic partnersand other like-minded institutionsto develop, modify and offer a widerrange of social loan productsto leverage our strengths andefforts to improve the well-being ofchildren by tackling poverty as awhole.We’ve launched social programs and varioussocial initiatives aimed at maximizing benefitsand impact for clients, their children andcommunities. Each year, we organize the bestclient selection program, child scholarshipprogram, best student award program, luckydraw program, and other charity events.We also provide employment opportunities forlocal community members, employ staff withphysical disabilities, deliver financial education,health education, and link clients with NGOpartners to receive other necessary nonfinancialservices such as food and water, health,education, HIV/AIDS, peace, and justice.Our persistent efforts continue to reach outto the most vulnerable people, such as thoseaffected with HIV/AIDS and Orphan andVulnerable Children (OVC) , disabled people,widowed women, child labourer families andother disadvantaged groups.32 VISIONFUND CAMBODIA ANNUAL REPORT 2012

VISIONFUND CAMBODIA ANNUAL REPORT 2012 33

SOCIAL IMPACTINITIATIVESTO IMPROVESOCIALPERFORMANCEVisionFund Cambodia is privileged toserve low-income Cambodians whoare mostly living in rural areas byproviding small loans and otherfinancial services to empower poorwomen and their families to improvethe lives of children and unlockthe potential for the communitiesto flourish.34 VISIONFUND CAMBODIA ANNUAL REPORT 2012

As of 31 December 2012, 83% of VisionFundCambodia’s 156,742 clients are engaged throughCommunity Bank, one of our three lendingmethodologies, which is specifically designed for poormicro-entrepreneurs with the loan sizes ranging fromUS$20 to US$350.with positive behavior change amongst communitypeople towards using water purifiers for safe waterconsumption. We currently have 12,644 clients withUS$293,061 loan portfolio. The partnership will notend there but plan to scale up to other provincesacross Cambodia.VisionFund Cambodia’s pro-poor approach isaccompanied by other socially-oriented initiatives tobetter our social performance including credit withspecial and flexible conditions to tailor to and meetthe needs of our target customers:• Loan for Business and Agriculture• Loan for Water and Sanitation Hygiene• Loan for Environmental Protection• Credit with Health Education• Education Loan• Loan for Rural Rice Miller Cooperatives• Loan for Victims of Natural Disastersand Cash-for-work Project• Loan for People with Disabilities• Loan for HIV/AIDS Affectedand OVC Households• Loan to Promote Child Rights• Child Scholarship/Best Client Program• Financial Education and Development Messages• Safety Net for the Poor (financial protectionin case of death)• SavingsLOANS FOR WATER AND SANITATIONHYGIENE (WASH)Loan for Clean Water: VisionFund Cambodiahas partnered with PATH (Program for AppropriateTechnology in Health) and Hydrologic Social Enterprisesince early 2011 to give loans to community peoplein several provinces, such as Kampong Speu, Kandal,Takeo and Kompong Cham, to enable them to buywater filters as part of promoting clean water in thecommunity. This initiative promotes good health careLoan for Sanitation Financing: VisionFundCambodia also partnered with PATH and iDE(International Development Enterprise) in early 2012and with WaterSHED in mid-2012 to pilot sanitationfinancing loan or loan for latrines in Kandal provinceand Battambang province respectively to gauge theproduct demand in the communities. We’ve currentlyhad 1,840 clients with a loan portfolio of US$135,551.We will scale up this project to other provinces uponthe completion of the pilot phase.LOAN FOR ENVIRONMENTALPROTECTIONVisionFund Cambodia has launched what is socalled,”Solar Energy Loan” in partnership with ISS(International Solar Solutions). We offer loan to clientsto purchase solar kits for home lighting as part ofpromoting child education at night and contributingto the reduction of global greenhouse effect. Thisinitiative took off as a pilot in Kampong Thom in 2011and is now ongoing.CREDIT WITH HEALTH EDUCATIONWe first piloted a social product called “Credit withHealth Education” to deliver health conversation,awareness and practices in WVC Koh Andaet ADP.After the pilot, in 2012 we rolled it out with WVCacross all the ADPs (Area Development Programs) inTakeo province. Thousands of community membersincluding 1,354 VisionFund Cambodia clients attendedbasic health sessions delivered by WVC ADPstaff on topics about dengue fever, diarrhea, fooddemonstration, hand washing, nutrition and generalhygiene, delivered by WVC ADP staff.VISIONFUND CAMBODIA ANNUAL REPORT 2012 35

SOCIAL IMPACTEDUCATION LOANVisionFund Cambodia developed a special loanproduct to target families whose children withoutstanding academic performance cannot pursuetheir higher education or vocational skills trainingdue to their financial constraints. The education loanamounts are up to US$2,000 and are repayable ininstalments for up to five years. It enables borrowers’children to complete vocational skills training, a fouryearBachelor’s Degree program or a Master’s Degreeprogram.LOAN FOR RURAL RICE MILLERCOOPERATIVESVisionFund Cambodia has for long offered theAssociation Loan to two rice miller cooperatives,one in Takeo and another in Kompong Chhnang. Thecooperatives were managed by CEDAC. Recently wehave extended such loan to a rice miller cooperative(185 households) in Kompong Chhnang, which isestimated to impact about 6,000 poor villagers in 7villages. They earned an income from the sales of milledrice, rice bran, fragmented rice bits and un-husked rice.We will continue to offer this type of loan to more ofWVC Agriculture Cooperatives and any other WVCfacilitatedassociations in the not-so-distant future.LOAN FOR VICTIMS OF NATURALDISASTERS AND CASH-FOR-WORKPROJECTThe effect of the devastating 2009 Ketsana stormon the lives of thousands of Cambodians in severalnorthern and north-eastern provinces promptedVisionFund Cambodia to innovate a special loan forthe victims and others affected by natural disasters,such as floods, drought spells, storms, etc.The Express (Emergency) Loan is designed for theaffected households to restart or start small businessor agricultural activities to increase their householdincome in the aftermath of natural disasters. The loansizes range up to US$250 and do not require anycollateral.Special attention and support is provided for thisgroup of clientele, including assistance in formulatingthe business plan and money management to ensurethat our loan will not add further financial stress andburden to them.VisionFund Cambodia also partnered with WVCin early 2012 and with Oxfam Great Britain in late2012 to deliver cash-for-work project that requiredVisionFund field staff to transport and hand in cash toapproximately 3,000 beneficiaries of WVC and 2,000beneficiaries of Oxfarm Great Britain respectivelyin Kandal and Kompong Thom province, where theywere badly affected by the 2011 floods.LOAN FOR PEOPLE WITH DISABILITIESCambodia records one of the highest rates of peoplewith disabilities in the world after prolonged civil warand consequential poverty. To play a role in empoweringthis particular group, VisionFund Cambodia deliversloans to clients with some forms of disabilities. Thefinancial aid offers hope and restores self-esteem tomany disabled Cambodians. We currently have 302disabled clients (US$98,747 loan portfolio).LOAN FOR HIV/AIDS AFFECTED ANDOVC HOUSEHOLDSIn partnership with the Khmer HIV/AIDS NGOAlliance (KHANA), VisionFund Cambodia began tooffer financial services to HIV/AIDS affected and OVChouseholds in Kampong Cham in 2007, with the aim toovercome barriers to economic opportunities facedby them.36 VISIONFUND CAMBODIA ANNUAL REPORT 2012

The innovative microfinance approach, the first of itskind in Cambodia, continues and even expands furtherwith WVC until today. We’ve currently served 191 HIV/AIDS affected and OVC households (US$34,685 loanportfolio) in all the provinces/ cities we operate. Withmicrofinance, the typically marginalized groups canincrease their income, better adhere to antiretroviraltherapy, experience less stigma and discrimination andregain optimism for their lives.LOAN TO PROMOTE CHILDREN’SRIGHTSVisionFund Cambodia collaborates with the nationaloffices of the International Labor Organization (ILO)and Plan International Cambodia to provide loans tofamilies in impoverished households with the aim togenerate income and with an emphasis on protectingthe rights of children.The partnerships are intended to enable vulnerablechildren to enjoy better opportunities including accessto education instead of needing to work to supporttheir families. An estimated 12,190 children werecurrently impacted by the loans of US$199,050 givento the families of the targeted groups in Phnom Penh,its outskirts and Kampong Cham and Siem Reap.CHILD SCHOLARSHIP/ BEST CLIENTPROGRAMTo help instil hope and aspiration for Cambodia’snext generation, VisionFund Cambodia has offeredscholarship to children of clients since 2007. To date,46 children of our clients have received annual cashscholarship worth US$100 to go toward schoolmaterials while the remaining funds are kept as child’ssavings till the completion of their high school.The scholarship inspires clients, especially ruralvillagers, to place greater value and importance on theirchild’s education, which often is given lower priority inrural areas. It is one of the benefits given to our bestclients selected annually based on a number of criteriaincluding their success in using the loan in generatingfar-reaching impact for their own households. Anoutstanding client who uses our financial serviceseffectively serves as a role model to inspire success inothers by using financial services effectively. Over thepast four years, 56 of our best performing clients havebeen selected to represent the majority of VisionFundCambodia’s clients who have enjoyed better livingstandards thanks to our loans.FINANCIAL EDUCATION ANDDEVELOPMENT MESSAGESAs part of improving loan quality with a strong socialfocus, VisionFund Cambodia has on top of its financialservice delivery provided financial education anddevelopment messages to create financial strength,one client at a time. Clients receive consultations onbusinesses and cash management including tips forcost minimization and profit maximization. VisionFundCambodia staff also actively promote social messageseducating clients about domestic violence, HIV & AIDSVISIONFUND CAMBODIA ANNUAL REPORT 2012 37

SOCIAL IMPACTprevention, child’s rights, gender equity and othersocial issues.In partnering with UNIAP, VisionFund Cambodiaprinted and distributed 60,000 copies of comic booksto clients in 2011. In late 2012, WVC approached usfor the printing and distributing of 13,500 copies of thecomic books to their Agriculture Cooperatives, targetfamilies and communities. The book was designed witha specific focus on financial education, featuring thebenefits of saving, the consequences of taking loanslarger than the repayment capacity, the consequencesof using a land title deed for multiple loans and takingloans for others.SAFETY NET FOR THE POORin Pursat, Battambang and Siem Reap. Clients whopurchase this insurance will receive such coverageas surgery, in-patient treatment, and other accidentrelatedtreatments.VisionFund Cambodia’s clients enjoy a safety netfor financial peace of mind as they and their familymembers are entitled to a form of credit life insurancewith funeral allowance as additional benefits packagedin cooperation with our affiliate, World VisionCambodia.In 2012, benefits worth US$114,395 were paid outto beneficiaries of 758 deceased clients and clients’deceased spouses and children. About 157,681 clientshave currently been covered with such additionalbenefits. The benefits have been used to pay off debtsand cover funeral cost, thereby reducing the financialburden for poor VisionFund Cambodia clients ortheir families who normally rely on their neighbors’donations, savings and asset liquidation.Also in late 2012, VisionFund Cambodia partneredwith PKMI (Prevoir Kampuchea Micro life InsurancePlc), a French affiliate insurance company, to pilotmicro health and disability insurance for clients38 VISIONFUND CAMBODIA ANNUAL REPORT 2012

CLIENT STORYThe loans from VisionFund fulfilledour dream of a better life.Solina was born in a poor family with no hope ofgetting a good education. Her mother Tub Tou, apublic school teacher in Kampong Chhnang provinceand also a farmer at the same time. Being jobless, herfather Long Savon, had to depart from home to jointhe army in the Cambodian border in Preah VihearProvince. Therefore, being the only bread winner inthe house, Soina’s mother had to work even harderto support the family. Solina, her sister and her littlebrother had to spend most of their time helping theirmother working in the rice field and other plantations.“My siblings and I never enjoyed our childhood and wedidn’t even expect to have any good education because ofour poor living condition.” said Lina.When her mother met VisionFund and received thefirst loan of $25 in 2003, their hope began to berealised. The money was used to buy crops for herrice, bean and watermelon farm. The harvest was verygood. They earned a profit of about $100 with whichthey paid off the loan and still had some surplus tofor buy more farming materials such as spade and jar.It helped them to farm better and easier. Since then,Solina and her sibling were less involved in the farmwork and had more time for school and self-study.Seeing the positive growth in the business from usingthe loan, Solina has requested for more loan in almostevery year. Lately in 2011, Solina’s mother received theninth loan to expand her plantation which will improvetheir income.The profit from the farming has also helped herto send Solina to attend university in Phnom Penh.Solina has graduated with a bachelor degree. With hergood academic results, she obtained a good job as anaccountant in a factory which is only 2 kilometer fromher home in Kampong Chhnang province. She has nowbecome a good model to other youths in her village.The parents are encouraged to send their children forhigher education.Despite hard work and condition, my mother was stillworking hard to send me to higher education. I am reallygrateful to her for everything I’ve got now. I also want toshare my knowledge with my villagers and to testify howwe struggled before we can have all our things today. Weare thankful to VisionFund for encouraging and supportingus financially. Their loans could fulfill our dream for betterlives.”VISIONFUND CAMBODIA ANNUAL REPORT 2012 39

SOCIAL IMPACTEnvironmental andEmployment Data at a glaNce2012 2011 2010ENVIRONMENTAL PERFORMANCE INDICATORSMaterialsPaper in kg/FTE (1) 28.84 25.50 8.79Loan form in kg 10870.52 9073.11 5552.38Office paper in kg 11652.82 8164.00 N/AWasteWaste paper in kg/FTE 2.37 1.08 N/AEnergyElectricity in kWh/FTE 480.36 355.55 238.29Gasoline in l/FTE 267.26 263.20 303.37Diesel in l/FTE 65.55 60.23 51.83Emission of CO2 (Equivalents – in thousands of kg) (2)Electricity 206.34 132.19 82.83Gasoline 500.95 427.01 460.15Diesel 140.79 111.97 90.07WaterWater in m3/FTE 26.08 30.94 25.29Business TravelBy vehicle in km/FTE 644.44 567.39 471.65By motorcycle in km/FTE 9,964.97 9,761.87 11324.59EMPLOYMENT INDICATORSEmploymentNumber of staff 820 700 627Female 271 254 246Male 549 446 381Number of staff (FTE) 775 676 632Training and EducationTraining – career development, refresher programs 6384 6181 2470Training new recruit – induction program 317 190 170Provide internship to local students 61 110 71(1)FTE: Average number of full-time co-workers during the year.(2)The CO 2equivalent is referred to the Greenhouse Gas Protocol calculation principles.40 VISIONFUND CAMBODIA ANNUAL REPORT 2012

AREAS OF OPERATIONVisionFund Cambodia currently deliversfinancial and non-financial services to lowincome residents in 20 provinces and municipality.We plan to expand nationwide by 2015Oddar MeancheyBanteayMeancheySiem ReapPreah VihearStung Tr engRatanakiriPailinBattambangKampong ThomKratieMondolkiriPursatKampongChhnangKampong ChamKoh KongKampongSpeuKampotPhnom PenhTa keoKandalPreyVeng SvayRiengSihanoukvilleKe pArears of OperationVISIONFUND CAMBODIA ANNUAL REPORT 2012 41

financialVisionFund Cambodia’s robustfinancial performance has helpedus maintain our ranking amongstCambodia’s top performingmicrofinance institutions.Earning a net profit of US$ 2.41 million for2012, the institution has total assets worthUS$53.34 million and equity of US$15.85millionwith financial self-sufficiency of 112% andoperational self-sufficiency of 119%.48MILLIONLOAN PORTFOLIO42 VISIONFUND CAMBODIA ANNUAL REPORT 2012

VISIONFUND CAMBODIA ANNUAL REPORT 2012 43

FINANCIALGrowth trendACTIVE CLIENTSDEC. 2007 - DEC. 2012DEC 12DEC 11DEC 10DEC 09DEC 08DEC 07156,742132,036108,04798,77778,09253,885LOAN PORTFOLIODEC. 2007 - DEC. 2012DEC 12$48,025,552DEC 11 $37,719,086DEC 10DEC 09DEC 08DEC 07$30,017,044$21,314,258$17,052,891$10,700,47844 VISIONFUND CAMBODIA ANNUAL REPORT 2012

TOTAL STAFFDEC. 2007 - DEC. 2012DEC 12DEC 11DEC 10DEC 09DEC 08DEC 07820700627637521330OPERATIONAL SELF-SUFFICIENCY RATIODEC. 2007 - DEC. 2012DEC 12DEC 11DEC 10DEC 09DEC 08DEC 07119%119%111%94%110%122%VISIONFUND CAMBODIA ANNUAL REPORT 2012 45

FINANCIALTOTAL ASSETSDEC. 2007 - DEC. 2012DEC 12DEC 11DEC 10DEC 09DEC 08DEC 07$55,342,557$44,236,309$36,627,028$26,531,016$23,073,394$13,543,18446 VISIONFUND CAMBODIA ANNUAL REPORT 2012

(extracted from financial staement for the year ended31 december 2012 and report of the independent auditors)REPORT OF THE INDEPENDENT AUDITORSTo the shareholdersVisionFund (Cambodia) LtdWe have audited the accompanying financial statementsof VisionFund (Cambodia) Ltd (“the Company”), whichcomprise the balance sheet as at 31 December 2012,and the income statement, the statement of changesin equity and the statement of cash flows for theyear then ended, and notes, comprising a summary ofsignificant accounting policies and other explanatoryinformation.Management’s Responsibility forthe Financial StatementsManagement is responsible for the preparation andfair presentation of these financial statements inaccordance with Cambodian Accounting Standardsand the guidelines of the National Bank of Cambodiarelating to the preparation and presentation offinancial statements, and for such internal control asmanagement determines is necessary to enable thepreparation of financial statements that are free frommaterial misstatement, whether due to fraud or error.Auditors’ ResponsibilityOur responsibility is to express an opinion on thesefinancial statements based on our audit. We conductedour audit in accordance with Cambodian InternationalStandards on Auditing. Those standards require thatwe comply with ethical requirements and plan andperform the audit to obtain reasonable assuranceabout whether the financial statements are free ofmaterial misstatement.An audit involves performing procedures to obtainaudit evidence about the amounts and disclosures in thefinancial statements. The procedures selected dependon our judgment, including the assessment of the risksof material misstatement of the financial statements,whether due to fraud or error. In making those riskassessments, we consider internal control relevantto the entity’s preparation and fair presentation ofthe financial statements in order to design auditprocedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion onthe effectiveness of the entity’s internal control. Anaudit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness ofaccounting estimates made by management, as wellas evaluating the overall presentation of the financialstatements.We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for ouraudit opinion.OpinionIn our opinion, the financial statements presentfairly, in all material respects, the financial position ofVisionFund (Cambodia) Ltd as at 31 December 2012,and its financial performance and its cash flows forthe year then ended, in accordance with CambodianAccounting Standards and the guidelines of theNational Bank of Cambodia relating to the preparationand presentation of the financial statements.VISIONFUND CAMBODIA ANNUAL REPORT 2012 47

FINANCIALBALANCE SHEET AS AT31 DEC. 201231 December 2012 31 December 2011KHR’ 000 US$ KHR’ 000 US$(At year-end(At year-endexchange rate)exchange rate)ASSETSCash on hand 422,723 105,813 283,167 70,108Deposits with banks 17,071,587 4,273,238 17,217,062 4,262,704Loans to customers - net 190,623,665 47,715,561 151,650,632 37,546,579Other receivables 3,965,468 992,608 3,179,674 787,243Amounts due from a related party 10,362 2,594 58,099 14,385Statutory deposits 4,549,633 1,138,832 3,788,360 937,945Investment 61,336 15,353 60,585 15,000Property and equipment 2,671,859 668,801 1,915,818 474,330Intangible assets 1,152,532 288,493 63,177 15,642Deferred tax assets, net 564,348 141,264 453,876 112,373TOTAL ASSETS 221,093,513 55,342,557 178,670,450 44,236,309LIABILITIES AND EQUITYLiabilitiesDeposits from customers 6,738,497 1,686,733 2,979,532 737,691Amounts due to related parties 30,441,375 7,619,869 30,746,059 7,612,295Other accruals and payables 7,334,426 1,835,901 6,022,791 1,491,159Provision for income tax 2,030,862 508,351 1,845,391 456,893Borrowings 111,209,171 27,837,089 87,749,299 21,725,501Total liabilities 157,754,331 39,487,943 129,343,072 32,023,539EquityShare capital 40,362,700 10,103,304 35,968,500 8,905,298Retained earnings 22,976,482 5,751,310 13,358,878 3,307,472Total equity 63,339,182 15,854,614 49,327,378 12,212,770TOTAL LIABILITIES AND EQUITY 221,093,513 55,342,557 178,670,450 44,236,30948 VISIONFUND CAMBODIA ANNUAL REPORT 2012

INCOME STATEMENTfor the YEAR ENDED31 DEC. 2012For the year endedFor the year ended31 December 2012 31 December 2011KHR'000 US$ KHR'000 US$(At year-end(At year-endexchange rate)exchange rate)Interest income 51,925,875 12,997,716 40,540,421 10,037,242Interest expense (12,299,488) (3,078,720) (10,525,268) (2,605,909)Net interest income 39,626,387 9,918,996 30,015,153 7,431,333Other operating income 1,111,480 278,218 1,144,544 283,373Operating income 40,737,867 10,197,214 31,159,697 7,714,706Allowance for bad and doubtful loans (765,809) (191,692) (696,186) (172,366)Operating and other expenses (28,501,568) (7,134,310) (21,674,057) (5,366,194)Profit from operations 11,470,490 2,871,212 8,789,454 2,176,146Grant income 551,677 138,092 267,723 66,284Profit before income tax 12,022,167 3,009,304 9,057,177 2,242,430Income tax expense (2,404,563) (601,893) (1,872,553) (463,618)Net profit for the year 9,617,604 2,407,411 7,184,624 1,778,812VISIONFUND CAMBODIA ANNUAL REPORT 2012 49

FINANCIALSTATEMENT OF CHANGES INEQUITY​for the YEAR ENDED31 DEC. 2012Share Retainedcapital earnings TotalKHR'000 KHR’000 KHR’000Balance as at 1 January 2011 31,375,700 6,174,254 37,549,954Converted from borrwings 4,592,800 - 4,592,800Net profit for the year - 7,184,624 7,184,624Balance as at 31 Dec. 2011 35,968,500 13,358,878 49,327,378Converted from borrwings 4,394,200 - 4,394,200Net profit for the year - 9,617,604 9,617,604Balance as at 31 Dec. 2012 40,362,700 22,976,482 63,339,182(US$ equivalents-Note 4) 10,103,304 5,751,310 15,854,614(At year-end exchange rate)50 VISIONFUND CAMBODIA ANNUAL REPORT 2012

STATEMENT OF CASH FLOWSFOR THE YEAR ENDED31 DEC. 201231 December 2012 31 December 2011KHR'000 US$ KHR'000 US$(At year-end(At year-endexchange rate)exchange rate)Cash flows from operating activitiesNet cash used in operating activities (25,921,930) (6,488,593) (19,941,279) (4,937,183)Cash flows from investing activitiesAcquisition of property and equipment (1,288,820) (322,608) (1,154,758) (285,902)Acquisition of intangible assets (1,109,266) (277,664) (67,205) (16,639)Proceeds from disposals of propertyand equipment - - 27,889 6,905Investment (751) (188) (60,585) (15,000)Net cash used in investing activities (2,398,837) (600,460) (1,254,659) (310,636)Cash flows from financing activitiesProceeds from related parties 19,320,979 4,836,290 21,531,853 5,330,986Repayments of term loan torelated party (15,194,737) (3,803,439) (6,918,350) (1,712,887)Proceeds from borrowings 49,219,290 12,320,223 56,578,469 14,008,039Repayments of borrowings (24,999,884) (6,257,793) (54,357,546) (13,458,169)Net cash generated fromfinancing activities 28,345,648 7,095,281 16,834,426 4,167,969Net increase/(decrease) in cashand cash equivalents 24,881 6,228 (4,361,512) (1,079,850)Cash and cash equivalents atthe beginning of the year 14,672,929 3,672,823 19,034,441 4,712,662Cash and cash equivalents atthe end of the year 14,697,810 3,679,051 14,672,929 3,632,812VISIONFUND CAMBODIA ANNUAL REPORT 2012 51

VISIONFUNDGLOBALLatin America &CaribbeanBoliviaDominican RepublicEcuadorEl SalvadorGuatemalaHondurasMexicoNicaraguaPeruAfricaEthiopiaGhanaKenyaMalawiMaliRwandaSenegalTanzaniaUgandaZambiaTotal Regional Portfolio: US$76,807,959Total Active Borrowers: 127,231Total Regional Portfolio: US$41,379,902Total Active Borrowers: 209,23452 VISIONFUND CAMBODIA ANNUAL REPORT 2012

Middle East &Eastern EuropeAlbaniaArmeniaAzerbaijanBosniaGeorgiaKosovoSerbiaMontenegroTotal Regional Portfolio: US$234,607,904Total Active Borrowers: 210,718ASIACambodiaIndiaIndonesiaMongoliaMyanmarPhilippinesSri LankaThailandVietnamTotal Regional Portfolio: US$65,975,661Total Active Borrowers: 259,392Statistical data including total outstanding portfolio and active borrowers are found on VisionFund website.Visit www.visionfund.org for the latest facts and figures.VISIONFUND CAMBODIA ANNUAL REPORT 2012 53