Tomato Specialized Bank

Annual Report 2010 របយករណ៍ បចំឆន ំ ២០១០ព័ត៌មនអំពធនគរេឈម ះធនគរ: ធនគរឯកេទស តូម៉ តូជញ ប័ណ: ធនគរឯកេទស តូម៉ តូ (ប ូរពីធនគរឯកេទស េប៊ស ទទួលបនជញ ប័ណ ចប់េបកដំេណ រករជផ ូវករេនៃថងទី ១០ ែខ កកក ឆន ំ ២០០៨ េកមចបប់ស ីពីគឹះថ នធនគរនិងហិរ ញ វតថ ុឆន ំ ១៩៩៩ ។)សយ ន: អគរេលខ ៥៦ (ឡ ូ ត៍េលខ ៤១) វ ិថីសេមចប៉ ន ពះនេតមសងក ត់ បឹង ំង ខណ ដូនេពញ ជធនីភនំេពញ ពះជចកកមព ុជ ។ទូរស័ពទ : ៨៥៥ ២៣ ៩៩៧ ៣៣៣ / ៩៩១ ៥៥៥ទូររ : ៨៥៥ ២៣ ៩៩៣ ៧១៧អុ ីែមលេគហទំព័រ: info@tomatobank.com.kh: www.tomatobank.com.khេដមទុនចុះបញជី: ៨,១ នដុ េមរ ិកសវនករឯកជយ: ម៉ ូរ ីសុន កក់ & សូេសយរេសកមមរបស់ធនគរ: ឥណទនេបបស់ទូេទឥណទនលំេន នឥណទនពណិ ជកមមឥណទនកសិកមមគណៈកមមករតតពិនិតយ: គណៈកមមករនិភ័យគណៈកមមករសវនកមមគណៈកមមករឥណទន‐5‐

Annual Report 2010 របយករណ៍ បចំឆន ំ ២០១០ធនគរឯកេទស តូម៉ តូTomato Specialized Bankទសនៈស័យVisionទសនៈវ ិស័យរបស់ធនគរឯកេទស តូម៉ តូ គឺេដមបីក យជធនគរដ៏រ ឹងមំមួយេនបេទសកមព ុជ មរយៈភពក់ទក់ទំនក់ទំនងជិតសន ិទធជមួយអតិថិជន ករផល់េសកមមយ៉ ងឆប់រហ័ស និងករែចករែលកដល់សហគមន៍ ំ។The vision of Best Specialized Bank is “To be a best bank in Cambodia throughout friendly customer relationship,speedy services and charity to community”.េបសកកមមMissionេបសកកមមរបស់ធនគរឯកេទស តូម៉ តូ គឺសំេផល់េសកមមហិរ ញ វតថ ុ េដមបីទទង់ដល់ជីវកមម ឬជីវកមមេនកមព ុជ ជពិេសសសហគសធុនតូចនិងមធយម ែដលចឬពុំចទទួលបននូវេសកមមហិរ ញ វតថ ុែដលមនប់ពីគឹះថ មនធនគរ និងហិរ ញ វតថ ុេផងៗេទត ។The mission of Best Specialized Bank is “To provide financial support for business or corporation inCambodia, especially Small and Medium Enterprises (SMEs) and Micro Enterprises who are either able or unableto access to financial service through existing financial institutions”.‐6‐

Annual Report 2010 របយករណ៍ បចំឆន ំ ២០១០Organizational ChartShareholdersBoad ofDirectorsAuditCommitteeRisk CommitteeCreditCommitteePresident/CEOInternal auditSenior ManagerFinance &AdministrationCreditDepartmentAssistantManagerAssistantManagerAccountant Cashier ReceiptionistCreditSupportOfficersCredit Officers‐7‐

Annual Report 2010 របយករណ៍ បចំឆន ំ ២០១០rcnasm

TOMATO SPECIALIZED BANK(formerly known as Best Specialized bank)FINANCIAL STATEMENTSANDREPORT OF INDEPENDENT AUDITORSFOR THE YEAR ENDED 31 DECEMBER 2010

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)FINANCIAL STATEMENTSAND REPORT OF INDEPENDENT AUDITORSFOR THE YEAR ENDED 31 DECEMBER 2010CORPORATE INFORMATIONBank : TOMATO SPECIALIZED BANKRegistration No. : Co-5029/08ERegistered office : No.66, Preah Norodom BoulevardPhnom PenhShareholders : Tomato Savings BankTomato2 Savings BankGlobal FinancingTS Discretionary Investment Co., LtdHappy FriendTSB Partners Co., LtdGNCO Co., Ltd (Registered in Cambodia)Mr. Oung NochMs. Shin Hyun SookMr. Kong Bunna RathMr. Duong MoeunMr. Lee Soo YoungBoard of Directors : Mr. Min Woo Sik, President & CEOMr. Lee Soo Young, DirectorMr. Kong In Uk, DirectorMr. Koo Byung Mo, DirectorExecutive Management : Mr. Min Woo Silk, President & CEOMr. Kong Bun Norin, Senior ManagerAuditors : MORISON KAK & ASSOCIES

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)FINANCIAL STATEMENTSAND REPORT OF INDEPENDENT AUDITORSFOR THE YEAR ENDED 31 DECEMBER 2010CONTENTSPage1. Report of the board of directors 1 - 42. Report of independent auditors 5 - 63. Balance sheet 74. Income statement 85. Statement of changes in equity 96. Cash flow statement 107. Notes to the financial statements 11 - 43APPENDIX: SUPLEMENTARY FINANCIAL INFORMATION AND OTHER NOTES ONCOMPLIANCE WITH THE NATIONAL BANK OF CAMBODIA’S PRAKAS*(PAGE I TO XV)*Appendix does not form part of the financial statements

REPORT OF THE BOARD OF DIRECTORSBAD AND DOUBTFUL LOANS AND ADVANCESBefore the financial statements of the Bank were drawn up, the Directors took reasonablesteps to ascertain that action had been taken in relation to the writing off of bad loans and themaking of provisions for doubtful loans, and satisfied themselves that all known bad loanshad been written off and adequate provisions made for bad and doubtful loans.At the date of this report, the Directors are not aware of any circumstances which wouldrender the amount written off for bad loans or the amount of the provision for doubtful loansin the financial statements of the Bank inadequate to any material amountCURRENT ASSETSBefore the financial statements of the Bank were drawn up, the Directors took reasonablesteps to ensure that any current assets, other than debts, which were unlikely to be realised inthe ordinary course of business at their value as shown in the accounting records of the Bankhave been written down to an amount which they might be expected to realise. At the date ofthis report, the Directors are not aware of any circumstances which would render the valuesattributed to the current assets in the financial statements of the Bank misleading.VALUATION METHODSAt the date of this report, the Directors are not aware of any circumstances that have arisenwhich would render adherence to the existing method of valuation of assets and liabilities inthe financial statements of the Bank misleading or inappropriate in any material respect.CONTINGENT AND OTHER LIABILITIESAt the date of this report, there is:(a)(b)no charge on the assets of the Bank which has arisen since the end of the financial yearwhich secures the liabilities of any other person, andno contingent liability in respect of the Bank that has arisen since the end of thefinancial year other than in the ordinary course of banking business.No contingent or other liability of the Bank has become enforceable, or is likely to becomeenforceable within the period of twelve months after the end of the financial year which, inthe opinion of the directors, will or may have a material effect on the ability of the Bank tomeet its obligations as and when they become due.CHANGE OF CIRCUMSTANCESAt the date of this report, the Directors are not aware of any circumstances, not otherwisedealt with in this report or the financial statements of the Bank, which would render anyamount stated in the financial statements misleading in any material respect.2

REPORT OF THE BOARD OF DIRECTORSITEMS OF AN UNUSUAL NATUREThe results of the operations of the Bank for the year ended 31 December 2010 were not, inthe opinion of the Directors, materially affected by any item, transaction or event of a materialand unusual nature.There has not arisen in the interval between the end of the year and the date of this report anyitem, transaction or event of a material and unusual nature likely, in the opinion of theDirectors, to substantially affect the results of the operations of the Bank for the currentfinancial year in which this report is made.THE BOARD OF DIRECTORSThe members of the Board of Directors who held office at the date of the last report are:Mr. Min Woo Sik President (appointed 13 December 2010)Mr. Kong In UK (Wook) Director (appointed 18 March 2010)Mr. Koo Byung Mo Director (appointed 18 March 2010)Mr. Hwang Se Yoen Director (resigned 18 March 2010)Mr. Hwang Yoon Gi Director (resigned 18 March 2010)Mr. Lee Soo YoungDirectorDIRECTORS’ INTERESTSThe Directors who held office at the end of the financial year and have a direct interest in theshares of the Bank are as follows:Number ofHoldingShares% USD 1 eachMr. Lee Soo Young 2.30% 186,100DIRECTORS’ BENEFITS2.30% 186,100During and at the end of the financial year, no arrangements subsisted to which the Bank is aparty with the object of enabling Directors of the Bank to acquire benefits by means of theacquisition of shares in or debentures of the Bank or any other body corporate.Since the end of the previous financial year, no director of the Bank has received or becomeentitled to receive any benefit by reason of a contract made by the Bank with the Directors orwith a firm of which the director is a member, or with a company in which the director has asubstantial financial interest other than as disclosed in the financial statements.3

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2010Share Retainedcapital earnings TotalUSD USD USDBalance as at 1 January 2009 4,000,000 (377,792) 3,622,208Share capital paid during the year 1,100,000 - 1,100,000Net loss for the year - 70,293 70,293Balance as at 31 December 2009 5,100,000 (307,499) 4,792,501Balance as at 1 January 2010 5,100,000 (307,499) 4,792,501Share capital paid during the year 3,000,000 - 3,000,000Net profit for the year - 152,111 152,111Balance as at 31 December 2010 8,100,000 (155,388) 7,944,612Balance as at 31 December 2010(KHR’000 equivalents) 32,829,300 (629,788) 32,199,512The accompanying notes form an integral part of these financial statements.9

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)CASH FLOW STATEMENTFOR THE YEAR ENDED 31 DECEMBER 20102010 2009USD KHR’000 USD(Restated)Cash flows from operating activitiesProfit/(loss) before income tax 208,067 843,295 76,711Adjustments for:Depreciation and amortisation 56,803 230,223 60,908None cash income (note 18) - - (70,165)Net impairment loss on loans and advances (note 6) 17,206 69,736 21,187Operating profit before changes in working capital 282,076 1,143,254 88,641Changes in operating assets and liabilities:Deposits and placements with banks - - 1,300,628Loans and advances to customers (1,791,673) (7,261,651) (1,808,558)Statutory deposits with central bank (150,000) (607,950) (65,000)Foreclosed properties - - (209,284)Other assets (18,548) (75,175) (6,202)Other liabilities 4,848 19,649 10,252Cash used in operations (1,673,297) (6,781,873) (689,523)Income tax paid (note 15) (7,794) (31,589) (5,895)Net cash used in operating activities (1,681,091) (6,813,462) (695,418)Cash flows from investing activitiesPurchase of property and equipment (note 10) (48,972) (198,484) (78,676)Net cash used in investing activities (48,972) (198,484) (78,676)Cash flows from financing activitiesProceeds from long term borrowing - - 400,000Proceeds from issue of shares 3,000,000 12,159,000 1,100,000Net cash generated from financing activities 3,000,000 12,159,000 1,500,000Net changes in cash and cash equivalents 1,269,937 5,147,054 725,906Cash and cash equivalents, beginning of year 869,548 3,524,278 143,642Cash and cash equivalents, end of year 2,139,485 8,671,332 869,548Represented by:Cash in hand 8,096 32,813 6,527Deposits and placements with banks 2,111,912 8,559,579 853,358Balances with central bank 19,477 78,940 9,6632,139,485 8,671,333 869,548The accompanying notes form an integral part of these financial statements.10

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20101. GeneralTomato Specialized Bank, formerly known as Best Specialized Bank, (the “Bank”) isprincipally engaged in the provisions of specialized banking business and the provisions ofrelated financial services in the Kingdom of Cambodia.The Bank was incorporated in the Kingdom of Cambodia and registered with the Ministry ofCommerce on 25 June 2008. The Bank obtained its permanent specialized banking licencefrom the National Bank of Cambodia (the “Central Bank” or “NBC”) on 10 July 2008. Underthe specialized banking licence, the Bank is only authorised to grant credit for small andmedium enterprises operating in the Kingdom of Cambodia.The Bank changed its name from Best Specialized Bank to Tomato Specialized Bank on 27January 2011 as approved by Ministry of Commerce.The Bank operates in one single office located in Phnom Penh at Fifth floor, Building No.66,Preah Norodom Boulevard and as at 31 December 2010, the Bank had 13 employees (31December 2009: 11 employees).2. Summary of significant accounting policies2.1 Basis of preparationThe financial statements of the Bank are prepared under the historical cost convention inaccordance with the guidelines issued by the NBC and Cambodian Accounting Standards(“CAS”). In applying CAS, the Bank also applies the Cambodian Financial ReportingStandard (“CFRS”) 7: Financial Instruments: Disclosures. This practice differs from theInternational Financial Reporting Standards which require that loans and receivables be carriedat amortised cost using the effective interest method of any difference between the initialamount and the maturity amount, and minus any reduction for impairment or uncollectability.The financial statements are prepared using the historical cost convention.The preparation of financial statements in conformity with CAS as modified by NBCguidelines requires the use of estimates and assumptions that affect the amounts reported inthe financial statements as at and for the year ended and accompanying notes. The estimateshave been made based on existing available information and Management’s best knowledgeof current event and actions; and therefore the actual results ultimately may differ from thoseestimates.The accompanying financial statements are prepared for jurisdiction of Cambodia and are notintended to present the financial position and results of operations and cash flows inaccordance with generally accepted accounting principles and practice in other countries andthose who are not informed about Cambodia’s procedures and practices.11

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20102. Summary of significant accounting policies (continued)2.2 New accounting standards and interpretationsThere were no standards, amendments to existing standards and interpretations which becameeffective in the year ended 31 December 2010.On 28 August 2009, the National Accounting Council announced the adoption of CambodianInternational Financial Reporting Standards (“CIFRS”) which are based on full InternationalFinancial Reporting Standards. Public accountable entities shall prepare their financialstatements in accordance with CIFRS for accounting period beginning on or after 1 January2012.The following Cambodian International Accounting Standards (“CIAS”) or CIFRS andamendments to existing standards, which have been published are relevant and mandatory forthe Bank’s accounting period beginning on or after 1 January 2012, but have not been earlyadopted by the Bank:• CIAS 1 (Revised), 'Presentation of Financial Statements'The revised standard prohibits the presentation of items of income and expenses (i.e.,'non-owner changes in equity') in the statement of changes in equity. All non-ownerchanges in equity are to be shown in a performance statement. Entities can opt topresent one performance statement (i.e. statement of comprehensive income) or twostatements (i.e. income statement and statement of comprehensive income). Entitieswhich restate or reclassify comparative information are required to present a restatedbalance sheet as at the beginning comparative period. The revised standard also clarifiesthat potential settlement of a liability by issue of equity is not relevant in determiningthe classification of a liability as current or non-current liability.• CIAS 16 (Amendment), 'Property, Plant and Equipment' (and consequential amendmentto CIAS 7, 'Statement of Cash Flows')The amended standard requires entities, whose ordinary activities comprise renting andsubsequently selling assets, to present proceeds from sale of those assets as revenue andto transfer the carrying amount of an asset to inventories when the asset becomes heldfor sale. A consequential amendment to CIAS 7 requires cash flows arising frompurchase, rental and sale of those assets to be classified as cash flows from operatingactivities.• CIAS 24 (Revised), ‘Related Party Disclosures’CIAS 24 was revised by (a) simplifying the definition of a related party, clarifying itsintended meaning and eliminating inconsistencies from the definition; and (b) providinga partial exemption from the disclosure requirements for government-related entities.• CIAS 32, ‘Financial Instruments: Presentation’The objective of this standard is to establish the principles for presenting financialinstruments as liabilities or equity and for offsetting financial assets and financialliabilities. It applies to the classification of financial instruments, from the perspective ofthe issuer, into financial assets, financial liabilities and equity instruments as well asclassification of related interest, dividends, losses and gains.12

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20102. Summary of significant accounting policies (continued)2.2 New accounting standards and interpretations (continued)• CIAS 36 (Amendment), 'Impairment of Assets'The amended standard states that where fair value less costs to sell is calculated on thebasis of discounted cash flows, disclosures equivalent to those for value-in-usecalculation should be made.• CIAS 38 (Amendment), 'Intangible Assets'The revised standard provides clarifications in respect of fair value measurement of anintangible asset acquired a business combination and it permits the grouping ofintangible assets as a single asset if each asset has similar useful economic lives.• CIAS 39, “Financial Instruments: Recognition and Measurement’The standard establishes principles for recognising and measuring financial assets,financial liabilities and some contracts to buy or sell non-financial items. Adoption ofCIAS 39 will result in the following revisions to the accounting policies on financialinstruments:Loans and advances to customersLoans and advances to customers are currently stated in the balance sheet at outstandingprincipal and interest, less any amounts written off and provision for loan losses.UnderCIAS 39, loans and receivables are initially recognised at fair value - which is the cashconsideration to originate or purchase the loan including any transaction costs - andsubsequently measured at amortised cost using the effective interest rate method.Deposits from banks and customersThe Bank currently measures deposits from banks and customers at the deposit amount.CIAS 39 requires that financial liabilities (which include deposits from banks andcustomers) to be measured at amortised cost.Impairment of financial assetsThe Bank currently follows the mandatory credit classification and provisioning asrequired by Prakas No. B7-09-074 dated 25 February 2009 issued by the Central Bank,as disclosed in note 2.8 to the financial statements. CIAS 39 requires the Bank to assessat each reporting date whether there is objective evidence that a financial asset orgroup of financial assets is impaired, either on an individual or collective assessmentbasis. Impairment loss is measured as the difference between an asset’s carryingamount and present value of estimated future cash flows (excluding future creditlosses that have not been incurred) discounted at the asset’s original effective interestrate. For the purposes of collective impairment assessment, assets are grouped on thebasis of similar credit risk characteristics.13

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20102. Summary of significant accounting policies (continued)2.2 New accounting standards and interpretations (continued)Interest income and interest expenseThe Bank currently recognises interest income and expense on an accrual basis atcontractual rates, except where serious doubt exists as to the collectibility, interest issuspended until it is realized on a cash basis. CIAS 39 requires interest income andexpense for all interest-bearing financial instruments to be recognised using theeffective interest method. In respect of a financial asset or a group of similar financialassets which are impaired, interest income is to be recognised at interest rate used indiscounting future cash flows for purpose of measuring the impairment loss.• CIFRS 7 (Amendment), ‘Financial instruments - Disclosures’The revised standard requires enhanced disclosures in respect of fair value measurementand liquidity risk. In particular, the amendment requires disclosure of fair values by fairvalue measurement hierarchy as follows:o Level 1 - Quoted prices (unadjusted) in active markets for identical assets orliabilities;o Level 2 - Inputs, other than quoted prices included within Level 1, that areobservable for an asset or liability, either directly or indirectly; ando Level 3 - Inputs for an asset or liability that are not based on observable market data.• CIFRS 9, ‘Financial instruments’The standard establishes principles for financial reporting of financial assets that willpresent relevant and useful information to users of financial statements for theirassessment of the amounts, timing and uncertainty of the entity's future cash flows.CIFRS 9 specify the bases for classification and measurement of financial assets,including some hybrid contracts. They require all financial assets to be: (a) classified onthe basis of an entity's business model for managing the financial assets and thecontractual cash flow characteristics of a financial asset; (b) initially measured at fairvalue, plus transaction costs in the case of a financial asset not at fair value throughprofit or loss; and (c) subsequently measured at amortised cost or fair value based onasset classification.Other than the standards and amendments to existing standards as set out above, the otherpublished standards, amendments and interpretations to existing standards, which areapplicable for accounting periods beginning on or after 1 January 2010, are not relevant to theBank’s operations.2.3 Foreign currencies translation(a)Functional and presentation currencyItems included in the financial statements of the Bank are measured using the currency of theprimary economic environment in which the Bank operates (‘the functional currency’).14

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20102. Summary of significant accounting policies (continued)2.3 Foreign currencies translation (continued)The national currency of Cambodia is the Khmer Riel (“KHR”). However, as the Banktransacts essentially in US Dollar (“USD”) and maintains its books of accounts primarily inUSD, the financial statements are presented in US$, which is the Bank’s functional andpresentation currency as it reflects the economic substance of the underlying events andcircumstances of the Bank.In compliance with the requirements of the NBC, all assets, liabilities, profit and lossstatement items in foreign currencies at the end of the year are converted into thousand KhmerRiel (“KHR’000”) using the official exchange rate announced by the NBC at the balancesheet date, of 1 USD = 4,053 KHR (31 December 2009: KHR 4,169). The purposes of suchconversions are to comply with NBC’s financial statements presentation guidelines only andshould not be construed as representations that the KHR amounts have been, could be, orcould in the future be, converted into USD at this or any other rate of exchange.(b)Transactions and balanceAssets and liabilities expressed in currencies other than USD are translated into USD at therate of exchange quoted by the NBC at the date of the balance sheet. Income and expensesarising in foreign currencies are converted at the rate of exchange prevailing on thetransaction dates. Exchange differences arising from conversion are reported on a net basis inthe income statement.2.4 Segment informationThe Bank operates within one business segment which is a specialised banking, and withinone geographical segment, the Kingdom of Cambodia2.5 Cash and cash equivalentsCash and cash equivalents comprise balances with original maturity of less than three monthsfrom the date of acquisition, including cash on hand, non-restricted balance with the CentralBank and balances with other banks.2.6 Statutory deposits with central bankStatutory deposits represent mandatory reserve deposits and cash maintained with the NBC incompliance with the Law on Banking and Financial Institutions (“LBFI”) and are notavailable to finance the Bank’s day-to-day operations and hence are not considered as part ofcash and cash equivalents for the purpose of the statement of cash flows.2.7 Loans and advances to customersLoans originated by the Bank by providing money directly to the borrowers at draw down arecategorised as loans and advances to customers and are carried at outstanding balance andinterest, less allowances for loan loss and any amount written off. Interest in suspenserepresents interest accrued on loan receivables that are doubtful or bad.15

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20102. Summary of significant accounting policies (continued)2.8 Allowances for loan lossesAllowances for loan losses are based on the latest mandatory credit classification andprovisioning guidelines required by Prakas B7-09-074 dated 25 February 2009 issued by theNBC. Allowances are made with regard to specific risks on loans individually reviewed andclassified into five classes as normal, special mention, substandard, doubtful and lossregardless of the assets (except cash) lodged as collateral.NBC guidelines require the following loan classification and minimum level of allowances:Classification Overdue Type of provisionRate ofallowancesNormal/StandardPerforming in accordance withcontractual termsGeneral provision 1%Special mention Thirty days or more Specific provision 3%Substandard More than ninety days Specific provision 20%Doubtful More than six months Specific provision 50%Loss More than one year Specific provision 100%Exception on the above provision rate may be considered but this is conditional on the actualmarket value of the collateral having been deemed acceptable by the NBC on a case-by-casebasis.In accordance with NBC guidelines, overdue loans are defined as the total outstandingprincipal where the principal or interest is past due.2.9 Intangible assetsIntangible assets, which comprise acquired computer software licenses and related costs, arestated at cost less accumulated amortisation and impairment loss. Acquired computer softwarelicenses are capitalised on the basis of the cost incurred to acquire the specific software andbring it to use. These costs are amortised using the straight-line method at the rate of 10% perannum.Costs associated with maintaining computer software are recognised as an expense whenincurred.16

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20102. Summary of significant accounting policies (continued)2.10 Property and equipmentProperty and equipment are stated at historical cost less accumulated depreciation andimpairment losses. Historical cost includes expenditure that is directly attributable to theacquisition of the items.Subsequent expenditures are included in the asset’s carrying amount or recognised as aseparate asset, as appropriate, only when it is probable that future economic benefitsassociated with the item will flow to the Bank and the cost of the item can be measuredreliably. All other repairs and maintenance are charged to the statement of income during thefinancial year in which they are incurred.Depreciation of property and equipment is calculated on a straight-line basis over theestimated useful lives of assets at the following rates per annum:Leasehold improvements 5%Office furniture and equipment 20%-25%Computer and IT equipment 50%Motor vehicles 25%An asset’s carrying amount is written down immediately to its recoverable amount if theasset’s carrying amount is greater than its estimated recoverable amount. The recoverableamount is the higher of the asset’s fair value less costs to sell and value in use.An item of property and equipment is derecognised upon disposal or when no futureeconomic benefits are expected from its use or disposal. Gains and losses on disposal aredetermined by comparing proceeds with carrying amount and are recognised in incomestatement.2.11 Properties foreclosedProperties foreclosed are related to properties taken over from customers, who are unable torepay their loans. Under the guidelines of the NBC, properties foreclosed are to be disposedof within twelve months.2.12 Impairment of non-financial assetsAssets that have an indefinite useful life are not subject to amortisation and are testedannually for impairment. Assets that are subject to amortisation or depreciation are reviewedfor impairment whenever events or changes in circumstances indicate that the carryingamount may not be recoverable. Impairment loss is recognised for the amount by which theasset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higherof an asset’s fair value less costs to sell and value in use.Any impairment loss is charged to income statement in the period in which it arises. Reversalof impairment loss is recognised in the income statement to the extent that the asset’s carryingamount does not exceed the carrying amount that would have been determined, net ofdepreciation and amortisation, had no impairment loss been recognised.17

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20102. Summary of significant accounting policies (continued)2.13 Interest income and expenseInterest earned on loans and advances to customers, deposits with the Central Bank and otherbanks are recognised on the accrual basis, except when loans and advances to customersbecome doubtful of collection, in which case, no interest is recognised as income.Where an account is classified as non-performing, recognition of interest income is suspendeduntil it is realised on a cash basis. Customer’s loan accounts are classified as non-performingwhere repayments are in arrears for ninety days and more.Interest expenses on borrowings are recognised on an accrual basis.2.14 Fee and commission incomeLoan arrangement fee and commissions are recognised in the income statement based on theoccurrence basis when service has been provided and a consideration received with all theconditions precedent are fulfilled.Service charges and processing fees are recognised when received.2.15 Operating leasesLeases in which a significant portion of the risks and rewards of ownership are retained by thelessor are classified as operating leases. Payments made under operating leases are charged tothe income statement on a straight-line basis over the period of the lease2.16 ProvisionsProvisions are recognised when the Bank has a present legal or constructive obligation as aresult of past events; it is more likely than not that an outflow of resources will be required tosettle the obligations; and a reliable estimate of the amount of the obligation can be made.When there are a number of similar obligations, the likelihood that an outflow will berequired in settlement is determined by considering the class of obligations as a whole.Provisions are measured at the present value of the expenditures expected to be required tosettle the obligation using a pre-tax rate that reflects current market assessments of the timevalue of money and the risks specific to the obligation. The increase in the provision due topassage of time is recognised as interest expense.2.17 Current and deferred income taxesIncome tax expense for the period comprises current and deferred tax. Tax is recognised asexpenses for the period. Taxes other than on income are recorded within operating expenses.Current tax is calculated on the basis of taxable profit using tax rates that have been enactedor substantially enacted at the balance sheet date in accordance with Cambodian Law onTaxation.18

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20102. Summary of significant accounting policies (continued)2.17 Current and deferred income taxes (continued)Deferred tax is provided in full, using the liability method, on temporary differences betweentax bases of assets and liabilities and their carrying amounts in the financial statements. Theamount of deferred tax provided is based on the expected manner of realisation or settlementof the carrying amount of assets and liabilities, using tax rate enacted or substantially enactedat the balance sheet date.A deferred tax asset is recognised only to the extent that it is more likely than not that futuretaxable profits will be available against which the asset can be utilised. Deferred tax assets arereduced to the extent that it is no longer probable that the related tax benefit will be realised.2.18 Related partiesParties are considered to be related if one party has the ability to control the other party orexercise significant influence over the other party in making financial and operatingdecisions.Under the LBFI, the definition of related parties includes parties who hold, directly orindirectly, at least 10 percent of the capital or voting rights and includes any individual whoparticipates in the administration, direction, management or internal control of the Bank.3. Critical accounting estimates and judgementsEstimates and judgements are continually evaluated and based on historical experience andother factors, including expectations with regard to future events that are believed to bereasonable under the circumstances. The Bank makes estimates and assumptions that affectthe reported amounts of assets and liabilities concerning the future. The resulting accountingestimates will, by definition, seldom equal the related actual results. The estimates andassumptions that have a significant risk of causing a material adjustment to the carryingamounts of assets and liabilities within the next financial year are discussed below.(a) Impairment losses on loans and advancesThe Bank follows the mandatory credit classification and provisioning as required by PrakasNo. B7-09-074 dated 25 February 2009 on asset classification and provisioning in the bankingand financial institutions issued by the NBC. The NBC requires specialised banks to classifytheir loans, advances and similar assets into five classes and the minimum mandatory level ofprovisioning is provided, depending on the classification concerned and regardless of theassets lodged as collateral. For the purpose of loan classification, the Bank takes into accountall risks and relevant factors which may affect the counterparties’ repayment abilities.(b) Income taxTaxes 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 taxexpenses will be made following inspection by the Tax Authorities.Where the final tax outcome is different from the amounts that were initially recorded, suchdifferences will have an impact on the income tax and deferred tax provisions in the financialperiod in which such determination is made.19

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20104. Deposits and placements with banks2010 2009USD KHR’000 USDCurrent accounts:First Commercial Bank 100 97,795 100Maruhan Japan Bank 990 4,012 1,000Cambodian Public Bank 1,750 7,093 15,439Shinhan Khmer Bank 9,204 37,304 40,256Advanced Bank of Asia 16,861 68,338 8,684Kookmin Bank Cambodia 591,057 2,395,554 119,695ACLEDA Bank 8,638 35,010 -628,600 2,645,106 185,174Savings account:First Commercial Bank 24,129 405 68,184Phnom Penh Commercial Bank 59,183 239,869 -83,312 240,274 68,184Fixed deposits:Advanced Bank of Asia 50,000 202,650 100,000Kookmin Bank Cambodia 450,000 1,823,850 500,000Phnom Penh Commercial Bank 900,000 3,647,699 -1,400,000 5,674,199 600,0002,111,912 8,559,579 853,358(a)Further analysis of the above deposits and placements is as follows:(i) By currency denomination:2010 2009USD KHR’000 USDUS dollars 2,111,912 8,559,579 853,358(ii) By maturity period:Within one month 1,161,912 4,709,230 853,358More than one month to three months 950,000 3,850,350 -2,111,912 8,559,579 853,35820

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20104. Deposits and placements with banks (continued)(b)The above deposits earn interest at the following rates per annum:(iii) By interest rates: 2010 2009% Per annum % Per annumMaruhan Japan Bank Nil 3.57%-3.75%Cambodian Public Bank Nil 4.00%-5.00%Shinhan Khmer Bank Nil 2.08%-4.15%Advanced Bank of Asia 1.00% - 3.00% 3.00%Kookmin Bank Cambodia 0.75% -2.00% 2.55%First Commercial Bank 0.40% NilPhnom Penh Commercial Bank 0.80% - 2.70% Nil5. Statutory deposits with central bank2010 2009USD KHR’000 USDStatutory capital deposit 405,000 1,641,465 255,000Reserve requirements on customer deposits 10,000 40,530 10,000(a) Statutory capital deposit:415,000 1,681,995 265,000Under NBC’s Prakas No. B 7-06-208 dated 13 September 2006, the Bank is required tomaintain a statutory deposit of five per cent of its capital. This deposit is not available for usein the Bank’s day-to-day operations and is refundable should the Bank voluntarily cease itsoperations in Cambodia.(b) Reserve requirements on customer deposits:The statutory customers’ reserve requirement with the NBC is to comply with the NBC’sPrakas No. B 7-00-05 dated 11 January 2000, on reserve requirement. This should represent aminimum of 5% of total deposits from customers and other borrowings. No interest is earned onthe statutory customers’ reserve deposit.As at 31 December 2010, the Bank has no customer deposit account. The reserve balance ismerely for the purpose of future use when the Bank decides to accept customer deposit.(c) The above deposits earn interest at the following rates per annum:2010 2009Statutory capital deposits 0.11% to 0.18% 0.28% to 0.68%5% of reserve requirements 0% 0%21

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20106. Loans and advances to customers2010 2009USD KHR’000 USDCommercial loans:Overdrafts - - 1,068Short term loans 660,000 2,674,980 893,661Long term loans 4,390,829 17,796,030 2,571,816Consumer loans:Housing loans 270,267 1,095,393 62,448Staff loans 18,232 73,894 18,6625,339,328 21,640,297 3,547,655Allowances for impairment losses-Specific (*) (6,055) (24,541) (7,717)Allowances for impairment losses-General (**) (51,772) (209,832) (32,904)5,281,501 21,405,924 3,507,034(*) Movements on allowances for impairment losses – specific are as follows:2010 2009USD KHR’000 USDAt beginning of year 7,717 31,277 19,434Addition during the year 26,535 107,546 193,707Movement during the year (28,197) (114,282) (205,424)At end of year 6,055 24,541 7,717(**) Movements on provisions for impairment losses – general are as follows:2010 2009USD KHR’000 USDAt beginning of year 32,904 133,360 -Addition during the year 26,363 106,849 32,904Movement during the year (7,495) (30,377) -At end of year 51,772 209,832 32,90422

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20106. Loans and advances to customers (continued)Further classification is as follows:(a) By performance:2010 2009USD KHR’000 USDNormal loans:Secured (*) 5,114,205 20,727,873 3,290,426Unsecured 63,000 255,339 -Special mention loans:Secured (*) 155,113 628,673 257,229Unsecured - - -Substandard loans:Secured (*) 7,010 28,412 -Unsecured - - -5,339,328 21,640,297 3,547,655(b) By maturity period:2010 2009USD KHR’000 USDWithin one month 24,000 97,272 -From one month to three months 190,100 770,475 375,858From four months to six months 720,145 2,918,748 449,866From seven months to one year 233,000 944,349 224,000From two years to three years 2,080,510 8,432,308 2,108,341From four years to five years 1,978,573 8,019,156 389,590Over five years 113,000 457,989 -5,339,328 21,640,297 3,547,655(c) By security2010 2009USD KHR’000 USDSecured (*) 5,276,328 21,384,958 3,547,655Unsecured 63,000 255,339 -5,339,328 21,640,297 3,547,655(*) Included in the ‘secured’ classification is an amount of USD 947,240 which representsloans secured by soft title deeds. In the case of default by borrowers, the Bank may encounterpotential legal impediments when liquidating collateral under a soft title deed as it has lesspriority status than a hard title deed collateral that is charged with the Land Registry Office.23

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20106. Loans and advances to customers (continued)(d) By currency denomination:2010 2009USD KHR’000 USDUS Dollar 5,339,328 21,640,297 3,547,655(e) By status of residence:2010 2009USD KHR’000 USDResidents 5,339,328 21,640,297 3,547,655(f) By relationship:2010 2009USD KHR’000 USDRelated parties 18,232 73,894 18,662Non related parties 5,321,096 21,566,403 3,528,993(g) By economic sectors:5,339,328 21,640,297 3,547,6552010 2009USD KHR’000 USDWholesale trade 2,001,518 8,112,153 1,803,870Hotel and restaurants 1,277,788 5,178,875 561,509Building and construction 500,836 2,029,888 300,000Agriculture 408,767 1,656,733 91,700Import 176,837 716,720 -Manufacturing 164,000 664,692 39,999Transport and storage 61,921 250,966 50,000Real estate 32,813 132,991 -Staff loans 18,232 73,894 18,662Jewellery - - 387,694Others 696,616 2,823,385 294,221(h) By large exposures:5,339,328 21,640,297 3,547,6552010 2009USD KHR’000 USDlarge exposures - - -Non Large exposures 5,339,328 21,640,297 3,547,6555,339,328 21,640,297 3,547,65524

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20106. Loans and advances to customers (continued)(i) By interest rates (per annum):2010 2009Loans and overdrafts 14.4% - 36.00% 16% - 24%Staff loans 8% 8%Housing loans 15% - 19.20% 18%7. Other assets2010 2009USD KHR’000 USDInterest receivables 47,031 190,617 28,064Prepaid expenses 10,346 41,932 19,068Guarantee deposits 31,399 127,260 26,349Other assets 3,263 13,225 108. Foreclosed properties92,039 373,034 73,491These represent bad loan collaterals foreclosed in the course of banking operations. Theseforeclosed assets are recorded at value equal to the corresponding loan principal outstanding.These assets will not be held for operational purposes and with the intention to be disposed ofto recover the outstanding amount within the maximum allowable period of twelve months asper NBC’s guidelines.The Bank is currently in process of requesting approval from NBC through a letter dated 17March 2011 for extension the period of foreclosed property. As of the date of this report, theBank has yet to receive a response from NBC.25

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 20109. Intangible assets2010 2009USD KHR’000 USDAcquisition cost of computer software 7,625 30,904 7,625Accumulated depreciation, opening balance (1,141) (4,624) (381)Charge during the year (776) (3,145) (760)Net book value 5,708 23,135 6,48410. Property and equipmentLeaseholdimprovementsFurniturefixtures andequipmentComputerequipmentMotorvehicles TotalUSD USD USD USD USDCostAt 1 January 2010 139,642 41,554 31,234 116,800 329,230Additions 12,407 3,344 33,221 - 48,972Disposals - - (16,141) - (16,141)Adjustments - - - - -At 31 December 2010 152,049 44,898 48,314 116,800 362,061Accumulated depreciationAt 1 January 2010 10,471 14,991 23,046 32,270 80,778Charge for the year 6,403 10,631 9,999 28,994 56,027Disposal - - (16,141) - (16,141)Adjustments - - - - -At 31 December 2010 16,874 25,622 16,904 61,264 120,664Net book valueAt 31 December 2010 135,175 19,276 31,41 55,536 241,397At 31 December 2009 129,171 26,563 8,188 84,530 248,452Depreciation charge for 2009 7,205 9,927 15,55 27,458 60,14826

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201010. Property and equipment (continued)Equivalent in KHR’000FurnitureLeasehold fixtures and Computer Motorimprovements equipment equipment vehicles TotalKHR’000 KHR’000 KHR’000 KHR’000 KHR’000CostAt 1 January 2010 565,969 168,418 126,591 473,390 1,334,369Additions 50,286 13,553 134,645 - 198,484Disposals - - (65,419) - (65,419)Adjustments - - - - -At 31 December 2010 616,255 181,971 195,817 473,390 1,467,434Accumulated depreciationAt 1 January 2010 42,439 60,759 93,405 130,790 327,393Charge for the year 25,951 43,087 40,526 117,513 227,077Disposal - - (65,419) - (65,419)Adjustments - - - - -At 31 December 2010 68,390 103,846 68,512 248,303 489,051Net book valueAt 31 December 2010 547,865 78,125 127,305 225,087 978,383At 31 December 2010 523,530 107,659 33,186 342,600 1,006,976Depreciation charge for 29,202 40,234 63,057 111,287 243,78011. Deferred income tax assets2010 2009USD KHR’000 USD(As restated)Deferred tax asset 24,572 99,590 72,470Deferred tax liability (2,206) (8,942) (2,305)22,365 90,647 70,165Movement on deferred tax is as follows:Tax lossesProperty andequipment TotalUSD USD USD(As restated)1 January 2009 72,470 (4,227) 68,243Charge (credit) to profit or loss for the year - 1,922 1,9221 January 2010 72,470 (2,305) 70,165Charge (credit) to profit or loss for the year (47,898) 98 (47,800)31 December 2010 24,572 (2,206) 22,36527

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201012. Advances from non-bank customersThis item represents the amounts placed by customers, who have borrowing accounts fromthe Bank, to repay interests and principles when they fall due. No interest is earned onadvances from non-bank customers.13. Borrowed fundsOn 9 April 2009, the Bank entered into borrowing agreement with an individual lender toborrow the sum of USD 400,000 for the purpose of increasing loan disbursements toborrowers. This borrowing is interest free and will be paid back within 36 months from thecontract date. As per the lending agreement, in the event of default, the lender has the right toconvert this loan amount in full into the Bank’s capital and the lender will become one of theBank’s shareholders, subject to Board of Directors’ resolution.14. Other liabilities2010 2009USD KHR’000 USDUnearned loan commission fees 22,291 90,345 16,532Interest in suspense 234 948 -Accrued professional fee 5,500 22,292 5,500Withholding tax 8,321 33,725 2,886Accrued payable 368 1,492 13,415Other liabilities 3,697 14,984 5,95915. Provision for income tax40,411 163,786 44,2922010 2009USD KHR’000 USDBalance at beginning of year 523 2,120 -Charge during the year 55,956 226,789 6,418Taxation paid during the year (7,794) (31,589) (5,895)Deferred tax assets recovered (note 11) (47,800) (193,733) -Balance at end of year 885 3,587 52328

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201016. Share capital2010 2009USD KHR’000 USDBalance at beginning of year 5,100,000 20,670,300 4,000,000Capital increase 3,000,000 12,159,000 1,100,000Balance at end of year 8,100,000 32,829,300 5,100,000The registered statutory capital of the Bank as at 31 December 2010 is 8,100,000 shares at apar value of USD 1 per share. All shares are fully paid.Base on the mandatory requirement Prakas B7-08-193 dated 19 September 2008 issued by theNational Bank of Cambodia required to have a minimum paid up capital of at least KHR 30billion, the Bank entered into a Memorandum of Understanding (MOU) with NBC on 30 July2010 commits to increase its paid up capital to KHR 30 billion by end of October 2010.During the year under review, the Bank has increased its paid up capital from USD 5.1million to USD 8.1 million by issuing 3 million ordinary shares of USD 1 at par value by cashpayment. This capital increase was authorised in principle by the National Bank of Cambodiaon 13 December 2010.In addition to increasing capital, three of the Bank shareholders, namely Bookook Securities,Finance Group Ten and MAC Investment Advisory, had sold out their shareholding. TheBank had amended its Memorandum and Articles of Association with the National Bank ofCambodia and the Ministry of Commerce dated 23 January 2011.17. Interest income2010 2009USD KHR’000 USDInterests from loans 760,238 3,081,245 549,322Interests from placement with banks 5,383 21,817 19,32418. Other operating income765,621 3,103,062 568,6462010 2009USD KHR’000 USD(As restated)Loan commission fees 35,708 144,725 35,742Deferred tax income - - 70,165Other income 4,677 18,956 1,98140,385 163,681 107,88829

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201019. Other operating expenses2010 2009USD KHR’000 USDRental expense 98,860 400,680 102,322Advertising expenses 24,655 99,927 37,316Business meal and public relationship 22,926 92,919 30,781Charitable donation 20,200 81,871 12,340Communication expenses 11,022 44,672 14,147Utilities expense 10,791 43,736 13,653Transportation and freight expense 9,539 38,662 5,941Fuel expense 8,613 34,908 8,793Professional fee 6,691 27,119 5,555Office supplies 6,190 25,088 6,073Security fee 5,760 23,345 5,850Repair and maintenance 3,953 16,022 3,237Other tax expense 28,924 117,229 16,989Miscellaneous expense 12,773 51,769 12,35820. Income tax expense270,897 1,097,947 275,355In accordance with Cambodian law, the Bank has an obligation to pay corporate income taxof the higher of 20% of taxable income or a minimum tax of 1% of revenues.The reconciliation of income tax expense computed at the statutory tax rate of 20% to theincome tax expense shown in the income statement is as follows:Current tax2010 2009USD KHR’000 USDNet profit before tax 208,067 843,295 70,293Statutory income tax @ 20% 41,613 168,659 14,058Adjustment in respect of prior year (90) (365) -Effect of permanent differences 14,433 58,495 (9,562)Effect of minimum tax 47,800 193,732 -Deferred tax (note 11)103,756 420,521 (9,562)Origination of temporary differences 98 400 1,922Utilisation of previous tax losses (47,898) (194,131) -(47,800) (193,731) 1,922Income tax expense 55,956 226,790 6,41830

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201020. Income tax expense (continued)Tax losses can be carried forward to offset against the taxable profits of subsequent years forup to five years from the year in which they were incurred. As at 31 December 2010, theBank had estimated unutilised tax losses of USD 122,859 that will expire in 2013.21. Tax interpretationThe Cambodian General Department of Taxation has two separate offices that are authorised toconduct tax audits of entities undertaking activities and doing business in Cambodia. Theapplication of tax laws and regulations on many types of transactions is susceptible to varyinginterpretations when reviewed by these two tax offices. The Bank’s judgement of its businessactivities may not coincide with the interpretation of the same activities by those tax offices.If a particular treatment was to be challenged by those various tax authorities, the Bank maybe assessed additional taxes, penalties and interest, which can be significant. Tax years remainopen to review by the tax authorities for three years with a possible extension of up to tenyears.22. Significant related party transactions2010 2009USD KHR’000 USDLoans and advances:Loans to the Bank’ shareholder immediatefamily 18,232 73,894 18,662Interest income:Interest income from loans 426 1,727 662Salaries and benefits:Salaries and fringe benefit to Board 153,614 622,598 153,19123. Commitments and contingencies23.1 Credit related commitmentsThe Bank has no commitments and contingent liabilities as a specialised bank is not in theposition to provide guarantees or contingent assurances.23.2 Lease commitmentsThe Bank has lease commitments in respect of the lease of Bank’s premises as follows:2010 2009USD KHR’000 USDNot later than one year 49,230 199,529 98,460Later than one year and not later than 4 years - - 49,23049,230 199,529 147,69031

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201024. Financial risk managementThe bank’s business involves taking on risks in a targeted manner and managing themprofessionally. The bank’s risk management is to identify all key risks, measure these risks,manage the risk positions and determine capital allocations. The risks arising from financialbusiness to which the Bank’s activities are exposed are operational risk, financial risks: creditrisk, market risk (including foreign exchange risk and interest rate risk), and liquidity risk.The following are policies and guidelines adopted by the Bank to manage risks related to itsbusiness activities.24.1 Operational riskThe operational risk is the risk of losses arising from inadequate or failed internal processes,people or systems or from external factors. This risk is managed through establishedoperational risk management processes, proper monitoring and reporting of the businessactivities by control and support units which are independent of the business units andoversight provided by the senior management. This includes legal, compliance, accountingand fraud risk.The operational risk management entails the establishment of policies and procedures toprovide guidance to the key operating units on the risk governance structure and baselineinternal controls necessary to identify, assess, monitor and control their operational risks.Internal control policies and measures that have been implemented including theestablishment of signing authorities, defining system parameters controls, streamliningprocedures and documentation ensuring compliance with regulatory and legal requirements.These are reviewed periodically, taking into account the business objectives and strategies ofthe Bank as well as regulatory requirements.24.2 Credit riskThe Bank assumes exposure to credit risk which is the risk that customers, clients or marketcounterparties fail to fulfil their contractual obligations to the Bank when due. Credit riskarises mainly from loans and advances and loan commitments arising from such lendingactivities.(a) Credit risk measurementThe Bank has set up the Credit Risk Policy which is designed to govern the Bank’s riskundertaking activities. Procedures of risk limit setting, monitoring, usage, and control aregoverned by credit programs which set out the plan for a particular product or portfolio,including the target market, terms and conditions, documentation and procedures under whicha credit product will be offered and measured.The Bank also ensures that there is a clear segregation of duties between loan originators,evaluators and approving authorities.32

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201024.2 Credit risk (continued)(b) Risk limit control and mitigation policiesThe Bank manages, limits and controls concentration of credit risk whenever they areidentified - in particular, to individual counterparties and groups, and to industries.The Bank structures the levels of credit risk it undertakes by placing limits on the amount ofrisk accepted in relation to one borrower, or groups of borrowers, and industry segments.Exposure to credit risk is managed through regular analysis of the ability of the borrowers andpotential borrowers to meet interest and capital repayment obligations and reviewing theselending limits where appropriate. Exposure to credit risk is also managed in part by obtainingcollateral and corporate or personal guarantees as well as by providing for loan losses. Limitson level of credit risk by product and industry sector are approved by Board of Directors.Commitments to extend credit represent unused portions of approved loans, guarantees orletters of credit. In general, all of the Bank’s guarantees and letters of credit are collateralisedwith cash deposits or collateral pledged to the Bank, and accordingly the Bank normallyassumes minimal risks.Large exposure is defined by the NBC as overall credit exposure to any single beneficiarywhich exceeds 10% of the Bank’s net worth. The Bank is required, under the conditions ofPrakas No. B7-06-226 of the NBC, to maintain at all times a maximum ratio of 20% betweenthe Bank’s overall credit exposure to any single beneficiary and the Bank’s net worth. Theaggregation of large credit exposure must not exceed 300% of the Bank’s net worth.(c) Impairment and provisioning policiesThe Bank is required to follow the mandatory credit classification and provisioning inaccordance with the relevant Prakas issued by NBC, as stated in note 2.8 to the financialstatements.Loans and advances less than 90 days past due are not considered impaired, unless otherinformation available indicates otherwise. A minimum level of specific provision forimpairment is made depending on the classification concerned. All loans and advances duefrom customers as at the balance sheet date were granted by the Bank during the year ended31 December 2010.(d) Maximum exposure to credit risk before collateral held or other credit enhancements2010 2009US$ Riel’ 000 US$Credit risks exposures relating to onbalancesheet assets:Deposits and placement with banks 2,111,912 8,559,579 853,358Loans and advances 5,281,501 21,405,924 3,507,034Other assets 92,039 373,034 73,4917,485,452 30,338,537 4,433,88333

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201024.2 Credit risk (continued)(d) Maximum exposure to credit risk before collateral held or other credit enhancements(continued)The table above represents the maximum credit risk exposure to the Bank as at 31 December2010, without taking into account any collateral held or other credit enhancements. For onbalancesheet assets, the exposures set out above are based on net carrying amounts. 71% ofthe total maximum credit exposure is derived from loans and advances to customers inCambodia.Management is confident of its ability to control and sustain minimal exposure to credit riskby the Bank resulting from its loans and advances based on the following:o Approximately 81% of the loans and advances of the Bank are collaterised such as hardtitle deed, soft title deed and cash. Loans and advances granted by the Bank are atapproximately 30% to 50% of the collateral value.o Most of all loans and advances portfolio are considered to be neither past due norimpaired, ando The Bank has a proper credit evaluation process in place for granting of loans andadvances to customers.(e) Loans and advancesLoans and advances are summarised as follows:2010 2009US$ Riel’ 000 US$Loans and advances neither past due nor impaired 5,177,205 20,983,212 3,290,426Loans and advances past due but not impaired 155,113 628,673 257,229Loans and advances individually impaired 7,010 28,412 -Gross 5,339,328 21,640,297 3,547,655Less:Provisions for loan losses (57,827) (234,373) (40,621)Net 5,281,501 21,405,924 3,507,034For the purpose of loan provisioning, expected recovery from collateral (except cash) is nottaken into consideration in accordance with the Central Bank’s requirement. Total provisionfor loan loss is USD 57,827 (2009: USD 40,621) which represents specific provision for theindividual loans and 1% general provision of total loans outstanding, net of specific provision.(i)Loans and advances neither past due or impairedLoans and advances not past due are not considered impaired, unless other information isavailable to indicate the contrary.34

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201024.2 Credit risk (continued)(ii)Loans and advances past due but not impairedLoans and advances less than 90 days past due are not considered impaired, unless otherinformation is available to indicate the contrary. In compliance with NBC guidelines, suchloans are classified as special mention with a specific provision of 3%.(iii) Loans and advances individually impairedLoans and advances individually impaired are loans and advances for which the Bankdetermines that there is objective evidence of impairment and it does not expect to collect allprincipal and interest due according to the contractual terms of the loans and advances. Inaccordance with NBC guidelines, loans and advances past due more than 90 days areconsidered impaired and minimum level of specific provision for impairment is madedepending on the classification concerned, unless other information is available to indicate thecontrary.(f) Concentration of financial assets with credit risk exposure(i) By geographical distributionThe credit exposure of the Bank as at 31 December 2010 is wholly derived from Cambodiabased on the country of domicile of the counterparties.(ii) By industry sectorBalanceswith otherbanksLoan andadvances tocustomersOtherassets Total TotalUS$ US$ US$ US$ KHR’ 000At 31 December 2010Agriculture - 408,767 - 408,767 1,656,733Building and construction - 500,836 - 500,836 2,029,888Import - 176,837 - 176,837 716,720Real estate - 32,813 - 32,813 132,991Financial institutions 2,111,912 - 727 2,112,639 8,562,526Hotel and restaurants - 1,277,788 - 1,277,788 5,178,875Textile industries - 64,000 - 64,000 259,392Manufacturing - 100,000 - 100,000 405,300Wholesale and retail - 2,001,518 - 2,001,518 8,112,152Transport and storage - 61,921 - 61,921 250,966Staff loans - 18,232 - 18,232 73,894Others - 696,616 91,312 787,928 3,193,4722,111,912 5,339,328 92,039 7,543,279 30,572,90935

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201024.2 Credit risk (continued)(f) Concentration of financial assets with credit risk exposure (continued)(ii) By industry sector (continued)Balanceswith otherbanksLoan andadvances tocustomersOtherassets Total TotalUS$ US$ US$ US$ KHR’ 000At 31 December 2009Agriculture - 91,700 - 91,700 371,660Building and construction - 300,000 - 300,000 1,215,900Financial institutions 853,358 - 514 853,872 3,460,743Jewellery - 387,694 - 387,694 1,571,324Hotel and restaurants - 561,509 - 561,509 2,275,796Manufacturing - 39,999 - 39,999 162,116Wholesale and retail - 1,803,870 - 1,803,870 7,311,085Transport and storage - 50,000 - 50,000 202,650Staff loans - 18,662 - 18,662 75,637Others - 294,221 72,977 367,198 1,488,25324.3 Market risk853,358 3,547,655 73,491 4,474,504 18,135,164The Bank takes on exposure to market risk, which is the risk that the fair value or future cashflow of a financial instrument will fluctuate because of changes in market prices. Market riskarises from open positions in interest rates, currency and equity products, all of which areexposed to general and specific market movements and changes in the level of volatility ofmarket rates or prices such as interest rates, credit spreads, foreign exchange rates and equityprices.24.3.1 Foreign currency exchange riskCurrency risk is the risk that the value of financial instruments will fluctuate due to changes inforeign exchange rates.The Bank has no material exposures to currency risk as it transacts essentially in US Dollar.Significant presence of US Dollar is a normal practice of banks operating in Cambodia as thisis a currency widely in use in Cambodia.24.3.2 Interest rate riskInterest rate risk refers to the volatility in net interest income as a result of changes in thelevels of interest rate and shifts in the composition of the assets and liabilities. Interest raterisk is managed through close monitoring of returns on investment, market pricing, cost offunds and through interest rate sensitivity gap analysis. The potential reduction in net interestincome from an unfavourable interest rate movement is monitored against the risk tolerancelimits set.36

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201024.3 Market risk (continued)24.3.2 Interest rate risk (continued)The Management is satisfied that the Bank’s position is such that exposure to movements ininterest rates is minimised.The table below summarises the Bank’s exposure to interest rate risks. Included in the tableare the Bank’s assets and liabilities at carrying amounts, categorised by the earlier ofcontractual re-pricing or maturity dates.(Continued)37

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201024. Financial risk management (continued)24.3.2 Interest rate risk (continued)As at 31 December 2010Up to 1month 1-3 months4-6months7-12months1 to 5yearsOver 5yearsNon-interestbearing TotalAverageinterest ratesUSD USD USD USD USD USD USD USD %Financial assetsCash in hand - - - - - - 8,096 8,096 -Deposits and placements with banks 533,312 950,000 - - - - 628,600 2,111,912 0.75% - 3.00%Balances with central bank - - - - - - 19,477 19,477 -Statutory deposits with central bank - - - - - 405,000 10,000 415,000 0.18%Loans and advances to customers:- Performing 24,000 190,100 720,145 233,000 4,052,073 113,000 - 5,332,318 8.0% - 36.0%- Non-performing - - - - 7,010 - - 7,010 8.0% - 36.0%- Specific provisions - - - - - - (51,772) (51,772) -- General provisions - - - - - - (6,055) (6,055) -Other assets - - - - - - 92,039 92,039 -Total financial assets 557,312 1,140,100 720,145 233,000 4,059,083 518,000 700,385 7,928,025Financial liabilitiesAdvances from non-bank customers - - - - - - 20,871 20,871 -Borrowing fund - - - - - - 400,000 400,000 -Other liabilities - - - - - - 40,411 40,411 -Provision for income tax - - - - - - 885 885 -Total financial liabilities - - - - - - 462,167 462,167Interest sensitivity gap 2010 (USD) 557,312 1,140,100 720,145 233,000 4,059,083 518,000 238,218 7,465,85838

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201024.3.2 Interest rate risk (continued)As at 31 December 2009Up to 1month 1-3 months4-6months7-12months1 to 5yearsOver 5yearsNon-interestbearing TotalAverageinterest ratesUSD USD USD USD USD USD USD USD %Financial assetsCash in hand - - - - - - 6,527 6,527 -Deposits and placements with banks 668,184 - - - - - 185,174 853,358 2.08%-5.00%Balances with central bank - - - - - - 9,663 9,663 -Statutory deposits with central bank - - - - - 255,000 10,000 265,000 0.28%-0.68%Loans and advances to customers:- Performing - 375,858 449,866 224,000 2,497,931 - - 3,547,655 8.0%-24.0%- Non-performing - - - - - - - - -- Specific provisions - - - - - - (32,904) (32,904) -- General provisions - - - - - - (7,717) (7,717) -Other assets - - - - - - 73,491 73,491 -Total financial assets 668,184 375,858 449,866 224,000 2,497,931 255,000 244,234 4,715,073Financial liabilitiesAdvances from non-bank customers - - - - - - 12,142 12,142 -Borrowing fund - - - - - - 400,000 400,000 -Other liabilities - - - - - - 44,292 44,292 -Provision for income tax - - - - - - 523 523 -Total financial liabilities - - - - - - 456,957 456,957Interest sensitivity gap 2009 (USD) 668,184 375,858 449,866 224,000 2,497,931 255,000 (212,723) 4,258,116As at the year end, the Bank does not have any fixed rate liabilities at fair value through profit or loss and does not have derivatives. Therefore, achange in interest rates at end of year would not affect profit or loss. Similarly, the Bank does not have significant variable rate instruments. Therefore,no cash flow sensitivity analysis was presented.39

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201024. Financial risk management (continued)24.4 Liquidity riskLiquidity risk is the risk that the Bank is unable to meet its obligation when they fall due as aresult of cash requirements from contractual commitments, or other cash outflows.(a) Liquidity risk management processThe Bank’s management monitors balance sheet liquidity and manages the concentration andprofile of debt maturities. Monitoring and reporting take the form of the daily cash positionand project for the next day, week and month respectively, as these are key periods forliquidity management.(b) Funding approachThe Bank’s main sources of liquidities arise from shareholder’s paid-up capital andborrowing. The sources of liquidity are regularly reviewed daily through management’sreview of maturity of borrowing.(c) Non-derivative cash flowsThe table below analyses non-derivative financial assets and liabilities of the Bank intorelevant maturity groupings based on the remaining period at the balance sheet date to thecontractual or estimated maturity dates. The amounts disclosed in the table are the contractualundiscounted cash flows, whereas the Bank manages the inherent liquidity risk based onexpected undiscounted cash flows.40

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201024. Financial risk management (continued)24.4 Liquidity risk (continued)As at 31 December 2010Up to 1No fixedmonth 1-3 months 3-6 months 6-12 months 1 to 5 years Over 5 years maturity date TotalUSD USD USD USD USD USD USD USDFinancial assetsCash in hand 8,096 - - - - - - 8,096Deposits and placements with banks 2,111,912 - - - - - - 2,111,912Balances with central bank 19,477 - - - - - - 19,477Statutory deposits with central bank - - - - - - 415,000 415,000Loans and advances to customers:- Performing 24,000 190,100 720,145 233,000 4,052,073 113,000 - 5,332,318- Non-performing 7,010 - - 7,010- Specific provisions - - - - - - (6,055) (6,055)- General provisions - - - - - - (51,772) (51,772)Other assets 46,607 2,902 4,367 30,813 5,200 - 2,150 92,039Total financial assets 2,210,092 193,002 724,512 263,813 4,064,283 113,000 359,323 7,928,025Financial liabilitiesAdvance from non-bank customers 20,871 - - - - - - 20,871Borrowing fund - - - - 400,000 - - 400,000Other liabilities 12,018 22,659 5,500 - - - 234 40,411Provision for income tax 885 - - - - - - 885Total financial liabilities 33,774 22,659 5,500 - 400,000 - 234 462,176Net position 2010 (USD) 2,176,318 170,343 719,012 263,813 3,664,283 113,000 359,089 7,465,858As at 31 December 2009Total financial assets 897,622 376,274 452,056 242,046 2,522,546 - 224,529 4,715,073Total financial liabilities 42,622 5,340 8,995 - 400,000 - - 456,957Net position 2009 (USD) 855,000 370,934 443,061 242,046 2,122,546 - 224,529 4,258,11641

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201025. Capital managementThe Bank considers the need to balance efficiency, flexibility and adequacy when determiningsufficiency of capital and when developing capital management plans. The Bank details theseconsiderations through an internal capital adequacy assessment process and the key featuresof which include (a) consideration of both economic and regulatory of minimum capitalrequirements set by the National Bank of Cambodia, (b) safeguarding the Bank’s ability tocontinue as a going concern so that it can continue to provide returns for shareholders andbenefits for other stakeholders, (c) maintaining a strong capital base to support thedevelopment of business.As of 31 December 2010, the Bank complies with minimum capital requirement on paid upcapital of KHR 30 billion, issued by the NBC, Prakas B7-08-193 dated 19 September 2008.The paid up capital was disclosed in note 15 to the financial statements.26. Fair value of financial assets and liabilitiesSince market prices for the major part of Bank’s financial assets and liabilities are notavailable, the fair value of these items is based on the estimates of the Management accordingto the type of assets and liabilities. According to the estimation of the Management, themarket value is not materially different from the carrying amount of all categories of assetsand liabilities.The carrying amounts and fair value of financial assets and liabilities are not presented on theBank’s balance sheet at their fair value. The estimated fair values are based on the followingmethodologies and assumptions:(a) Deposits and placements with other banksDeposits and placements with other banks include current accounts, saving deposits and fixeddeposits. The fair values of deposits and placements with other banks approximates theircarrying amounts.(b) Loans and advances to customersLoans and advances are stated at outstanding balance and interest, net of provision for loanlosses. The provision of loan losses is made in accordance with the requirements of therelevant Prakas issued by the NBC.(c) Other assets and liabilitiesThe carrying amounts of other financial assets and liabilities are assumed to approximate theirfair values as these items are not materially sensitive to the shift in market interest rates42

TOMATO SPECIALIZED BANK (formerly known as Best Specialized bank)NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 201027. Restatement of comparative figuresWhere necessary, comparative figures have been reclassified or restated to conform withchanges in presentation in the current year.The following comparative figures have been restated to conform to the current yearpresentation.2009 2009USDUSD(As previously(As restated) stated)AssetsLoans and advances to customersLoan receivable - interest receivables - 27,550Other assetsLoan receivable - interest receivables 27,550 -Deferred tax assets 70,165 -Other operating incomesDeferred tax income 70,165 -ProfitNet profit 70,293 12843

APPENDIX: SUPPLEMENTARY FINANCIAL INFORMATIONAND OTHER NOTES ON COMPLIANCE WITH THE NATIONALBANK OF CAMBODIA’S PRAKASRatio and information contained in this section have been extracted from data containedin the audited financial statements for the year ended 31 December 2010

TOMATO SPECIALIZED BANK(formerly known as Best Specialized bank)UNAUDITEDAPPENDIX: SUPPLEMENTARY FINANCIAL INFORMATION AND OTHERNOTES ON COMPLIANCE WITH THE CENTRAL BANK’S PRAKASFOR THE YEAR ENDED 31 DECEMBER 20101. NET WORTH, Prakas No. B7-00-47The Bank’s Net Worth as at 31 December 2010 amounted to USD 8,072,783 and USD8,042,737 under current and new pro-forma method, respectively. As at 31 December 2010,the Bank’s net worth on both calculation is higher by USD 672,783 and USD 642,737,respectively, compared to the minimum capital of USD 7,400,000 (equivalent to KHR 30billion at exchange rate of USD1 = KHR4,053).The Net Worth calculation is detailed in Schedule 1.2. SOLVENCY RATIO, Prakas No. B7-04-206As at 31 December 2010, the Bank maintained a Solvency Ratio of 104.84% under currentmethod calculation, representing the Bank’s net worth as a percentage of its risk-weightedassets and off-balance sheet items.The Bank was in compliance with this Prakas which requires a Solvency Ratio of at least15%.The Solvency Ratio calculation is detailed in Schedule 2.3. LIQUIDITY RATIO, Prakas No. B7-04-207The Bank was in compliance with this Prakas which requires a Liquidity Ratio of at least50%. As at 31 December 2010, the Bank’s Liquidity Ratio was higher than 100%.The Liquidity Ratio calculation is detailed in Schedule 3.4. MINIMUM CAPITAL REQUIREMENT, Prakas No. B7-08-193The NBC’s Prakas No. B7-08-193 on new capital requirement and criteria for licensingapproval of banks requires that specialised banks locally incorporated as companies whichhave at least one influential shareholder as a bank of financial institution with a rating“investment grade”, extended by a reputable rating agency must have minimum capital equalto at least KHR 10 billion (or USD 2.5 million) and specialized banks having shareholders asindividuals or companies must have a minimum capital of at least KHR 30 billion (or USD7.4 million) by end of year 2010.As 31 December 2010, the Bank has increased its paid up statutory capital from USD 5.1million to USD 8.1 million by issuing 3 million ordinary shares of USD 1 at par value by cashpayment. This capital increase was authorised in principle by the National Bank of Cambodiaon 13 December 2010. The Banks has complied with the minimum capital requirement issuedby NBC.II

TOMATO SPECIALIZED BANK(formerly known as Best Specialized bank)UNAUDITEDAPPENDIX: SUPPLEMENTARY FINANCIAL INFORMATION AND OTHERNOTES ON COMPLIANCE WITH THE CENTRAL BANK’S PRAKASFOR THE YEAR ENDED 31 DECEMBER 20105. FOREIGN CURRENCY TRANSACTIONS, Prakas No. B7-00-50The Bank transacts its business primarily in United States dollars (USD) and maintains itsbooks of accounts in USD. Accordingly, all currencies other than USD are considered asforeign currencies.Balance sheet itemsAs at 31 December 2010, in accordance with Prakas No. B7-00-50, all assets and liabilities ofthe Bank that were denominated in foreign currencies were translated using the year endexchange rate.As at 31 December 2010, the Bank had no commitments of the off balance sheet items.6. LOAN CLASSIFICATION AND PROVISIONING, Prakas No. B7-09-074As at 31 December 2010, provision calculated and reported is USD 1,402 on non-performingloans and advances identified by the Bank.The Bank is in compliance with the Central Bank’s requirement, with respect to the minimumlevel of specific provisioning to be applied on the respective classification of loans andadvances, as defined by this Prakas.The Loan classification and provisioning calculation is detailed in Schedule 4.7. NET OPEN POSITION IN FOREIGN CURRENCY, Prakas No. B7-07-134Net open position in foreign currencies in either any foreign currency or overall net openposition in all foreign currencies, whether long or short, shall not exceed 20% of Bank’s networth.As at 31 December 2010, the Bank is in compliance with the Prakas of net open position inforeign currency.The net open position in foreign currency is detailed in Schedule 5.III

TOMATO SPECIALIZED BANK(formerly known as Best Specialized bank)UNAUDITEDAPPENDIX: SUPPLEMENTARY FINANCIAL INFORMATION AND OTHERNOTES ON COMPLIANCE WITH THE CENTRAL BANK’S PRAKASFOR THE YEAR ENDED 31 DECEMBER 20108. LARGE CREDIT EXPOSURES, B7-06-226Banks are required, under the conditions of the above Prakas, to maintain at all times amaximum ratio of 20% between their overall exposure resulting from their operations witheach individual beneficiary and their net worth and the aggregate individual large creditexposure must not be more than 300% of the Bank’s net worth.As at 31 December 2010, the Bank had no exposure with a single beneficiary where suchexposure exceeded 20% and 300% as aggregate of individual large credit exposure of the networth as computed in Schedule 2.9. LOANS TO RELATED PARTIES, Prakas No. B7-02-146The Bank was in compliance with this Prakas which requires the total of the weightedoutstanding balances of loans to related parties to be not more than 10% of the Bank’s networth.10. FIXED ASSETS, Prakas No. B7-01-186 dated 8 November 2001Fixed assets acquired by banks for operational purposes shall be less than 30% of the Bank’stotal net worth as defined in Prakas B7-00-47. Fixed assets with no direct link to operating theBank shall be sold not later than one year after the date they became property of the Bank.As at 31 December 2010, the Bank’s fixed assets amounting to USD 247,105 was equivalentto 3.06% of the Bank’s net worth and this is therefore comply with the fixed asset ratiorequired by this Prakas.Foreclosed property amounting to USD 209,284 represent bad loan collaterals foreclosed inthe course of banking operations. These foreclosed assets are recorded at value equal to thecorresponding loan principal outstanding. These assets will not be held for operationalpurposes and with the intention to be disposed of to recover the outstanding amount withinthe maximum allowable period of twelve months as per NBC’s guidelines.The Bank is currently in the process of requesting approval from NBC through a letter dated17 March 2011 for extension of the period of foreclosed property. As of the date of thisreport, the Bank has yet to receive a response from NBC.IV

TOMATO SPECIALIZED BANK(formerly known as Best Specialized bank)UNAUDITEDSCHEDULE 1NET WORTHAS AT 31 DECEMBER 2010 (CURRENT VERSION)In accordance with the NBC’s Prakas No. B7-00-47 dated 16 February 2000; the Bankshould maintain a permanent net worth value to at least its paid-up share capital. The Bank’snet worth as at 31 December 2010 was calculated as follows:CATEGORY A ITEMS2010 2009USD KHR’000 USD(As restated)Paid in capital or endowment 8,100,000 32,829,300 5,100,000Reserves other than re-evaluation reserves - - -Share premiums - - -Provision for general banking risks - - -Current year earnings 152,111 616,505 70,293Retained earnings - - -Other items approved by NBC - - -SUB-TOTAL A 8,252,111 33,445,805 5,170,293CATEGORY B ITEMSHolding of own shares - - -Accumulated losses 155,388 1,246,293 307,499Intangible assets 5,708 23,135 6,484Loss determined on dates other than year-end - - -SUB-TOTAL B 161,096 1,269,428 313,983C. BASE NET WORTH (A-B) 8,091,015 32,792,882 4,856,310CATEGORY D ITEMSRevaluation reserves - - -Subordinated debts - - -Other items approved by the NBC - - -SUB-TOTAL D - - -CATEGORY E ITEMSEquity participation in bankingor financial institutions - - -Other items: related party loans 18,232 73,894 18,662SUB-TOTAL E 18,232 73,894 18,662F. TOTAL NET WORTH (C+D-E) 8,072,783 32,718,988 4,837,648V

TOMATO SPECIALIZED BANK(formerly known as Best Specialized bank)UNAUDITEDSCHEDULE 1 (continued)NET WORTHAS AT 31 DECEMBER 2010 (PRO FORMA VERSION)In accordance with the NBC’s Prakas No. B7-010-182 dated 15 October 2010; the Bank isrequired to calculate its net worth according to two methods (current Prakas and new Prakas)running in parallel. The parallel run will end by 30 April 2011 and then the new methodologywill become regulatory for all limits and ratios starting from reports issued as of 31 May2011. The Bank’s net worth using the new method as at 31 December 2010 was calculated asfollows:2010 2009USD KHR’000 USDTIER 1: CORE CAPITAL(As restated)CATEGORY AITEMSPaid up capital 8,100,000 32,829,300 5,100,000Reserves other than re-evaluation reserves - - -Audited net profit (last financial year) 70,293 284,898 -Retained earnings - - -Sub-total A: Items to be added 8,170,293 33,114,198 5,170,293Limit check on retained earnings(Max. 20 % of sub-total A) 0% 0%CATEGORY B ITEMSHolding of own shares - - -Accumulated losses 155,388 629,788 307,499Intangible assets 5,708 23,135 6,484Due from related parties 18,232 73,894 18,662Loss determined on dates other than year-end - - -Sub-total B:Items to be deducted 179,328 726,817 332,645TOTAL TIER 1 CORE CAPITAL (A-B) 7,990,965 32,387,381 4,767,355TIER 2: COMPLEMENTARY CAPITALCATEGORY C ITEMSRevaluation reserves - - -Provisions for general banking risks - - -1% general provision 51,772 209,832 32,904Subordinated debts - - -Sub-total C: Items to be added 51,772 209,832 32,904Limit check on subordinated debt - - -(Max. 50 % of Tier 1 capital) 0% 0%CATEGORY D ITEMSEquity participation in banking or financial institutions - - -Other items - - -Sub-total D: Items to be deducted - - -TOTAL TIER 2 (Complementary Capital) (C - D) 51,772 209,832 32,904Limit check on tier 2 capital(Tier 2 = max. 100% of tier 1) 0.65% 0.69%E. TOTAL NET WORTH (A-B+C-D) 8,042,737 32,597,213 4,800,259VI

TOMATO SPECIALIZED BANK(formerly known as Best Specialized bank)UNAUDITEDSCHEDULE 2SOLVENCY RATIOAS AT 31 DECEMBER 2010In accordance with the NBC’s Prakas No. B 7-00-46 dated 16 February 2000 amended byPrakas No. B7-04-206 dated 29 December 2004 and Prakas No. B7-07-135 dated 27 August2009; banks shall observe a solvency ratio which is the ratio of their net worth to theiraggregate credit risk exposures. The result found shall not be less than 15 per cent.NUMERATOR2010 2009Weighting USD KHR’000 USDA. Net worth as at 31 December 8,072,783 32,718,988 4,837,648DENOMINATORCash in hand 0% - - -Deposits with the NBC 0% - - -Claims on Sovereigns rated AAA to AA- 0% - - -Claims on Sovereigns rated A+ to A- 20% - - -Claims on banks rated AAA to AA- 20% - - -Claims on Sovereigns rated BBB+ to BBB- 50% - - -Claims on banks rated A+ to A- 50% - - -Other assets 100% 7,700,444 31,209,900 4,649,651Off-balance sheet items:Full risk 100% - - -Medium risk 50% - - -Moderate risk 20% - - -B. Total risk-weighted assets 7,700,444 31,209,900 4,649,651SOLVENCY RATIO (A/B) 104.84% 104.04%VII

TOMATO SPECIALIZED BANK(formerly known as Best Specialized bank)UNAUDITEDSCHEDULE 3LIQUIDITY RATIOAS AT 31 DECEMBER 2010In accordance with the NBC’s Prakas No. B 7-00-38 dated 9 February 2000 amended byPrakas No. B 7-02-187 dated 13 September 2002 and by Prakas No. B7-04-207 dated 29December 2004; banks are required to calculate a liquidity ratio which should be at least 50%.Details of calculations are shown below:A. NUMERATOR2010 2009USD KHR’000 USDDebit itemsCash and gold 8,096 32,813 6,527Deposits with the NBC excluding statutory deposits 19,477 78,941 9,663Deposits with banks (1 month) 2,111,912 8,559,579 853,358Total debit items 2,139,485 8,671,333 869,548Credit itemsSight accounts with NBC, banks and financial institutions - - -Borrowing from NBC and banks less than one month to run - - -Total credit items - - -TOTAL A. Lender / (Borrower) position 2,139,485 8,671,333 869,548B. DENOMINATORFixed deposits less than one month at 80% - - -Fixed deposits more than one month at 50% - - -Saving deposits at 50% - - -Demand deposits at 60% 12,523 50,754 7,285TOTAL B 12,523 50,754 7,285Liquidity ratio (A/B) > 100 % >100 %VIII

TOMATO SPECIALIZED BANK(formerly known as Best Specialized bank)UNAUDITEDSCHEDULE 4LOAN CLASSIFICATION AND PROVISIONINGAS AT 31 DECEMBER 2010In accordance with the NBC’s Prakas No. B 7-09-074 dated 25 February 2009, banks shallclassify their loan portfolio and their off-balance sheet commitments into five classes definedas standard, special mention, substandard, doubtful and loss, and record allowance forimpairment regardless of the assets (except cash) lodged as collateral. The loan classificationand provision for impairment losses as at 31 December 2010 are as follows:Principal NBC’s Bank’sLoans Rate Standard Provision VarianceAs at 31 December 2010 USD % USD USD USDStandard 5,177,205 1 51,772 51,772 -Special mention 155,113 3 4,653 4,653 -Substandard 7,010 20 1,402 1,402 -Doubtful - 50 - - -Loss - 100 - - -5,339,328 57,827 57,827 -Equivalent in KHR’000 % KHR’000 KHR’000 KHR’000Standard 20,983,212 1 209,832 209,832 -Special mention 628,673 3 18,860 18,860 -Substandard 28,4121 20 5,682 5,682 -Doubtful - 50 - - -Loss - 100 - - -21,640,296 234,374 234,374 -Principal NBC’s Bank’sLoans Rate Standard Provision VarianceAs at 31 December 2009 USD % USD USD USDStandard 3,290,426 1 32,904 32,904 -Special mention 257,229 3 7,717 7,717 -Substandard - 20 - - -Doubtful - 50 - - -Loss - 100 - - -3,547,655 40,621 40,621 -IX

TOMATO SPECIALIZED BANK UNAUDITED(formerly known as Best Specialized bank)SCHEDULE 5FOREIGN CURRENCY NET OPEN POSITIONAS AT 31 DECEMBER 2010• Foreign currency net open position (Prakas B7-07-134 dated 27 August 2007)CurrencyElement after deduction of affected provision Net open position Net open1 2 3 4 5 position/NetLiabilities and Currency Currencies +(long) or -Assetscapitalreceivables payables(short) worth+ - + - (1+2+3+4) (%)Limit(%)Excess(%)USD 8,403,234 (8,406,779) - - (3,545) -0.04% 20% -KHR 3,545 - - - 3,545 0.04% 20% -Grand total 8,406,779 (8,406,779) - - - - - -X

TOMATO SPECIALIZED BANK(formerly known as Best Specialized bank)UNAUDITEDCOMPUTATION OF OTHER RATIOSFINANCIAL SOUNDNESS INDICATORSAS AT 31 DECEMBER 2010I - CAPITAL31-Dec-10 31-Dec-09USD or % USD or %1 Equity to Total Assets (A/B) 94.50% 91.30%A - Equity 7,944,612 4,792,501B - Total assets 8,406,779 5,249,4582 Capital Tier I to Total Asset (A/B) 96.35% 97.15%A - Capital tier 1 8,100,000 5,100,000B - Total Assets 8,406,779 5,249,4583 Capital Tier I to Risk weighted Assets (A/B) 105.19% 109.69%A - Capital tier 1 8,100,000 5,100,000B - Risk weighted assets 7,700,444 4,649,6514 Capital Tier I + Tier II to risk-weighted Asset (A/B) 103.17% 103.07%A - Capital tier 1 + tier 2 7,944,612 4,792,501B - Risk weighted assets 7,700,444 4,649,6515 Net worth to Total Assets (A/B) 96.03% 92.16%A - Net worth 8,072,783 4,837,648B - Total Assets 8,406,779 5,249,4586 Solvency Ratio (A/B) 104.84% 104.04%A - Net worth 8,072,783 4,837,648B - Risk weighted assets 7,700,444 4,649,6517 Debt to total asset (A/B) 5.50% 8.70%A - Total liabilities 462,167 456,957B - Total assets 8,406,779 5,249,4588 Debt to equity (A/B) 5.82% 9.53%A - Total liabilities 462,167 456,957B - Equity 7,944,612 4,792,5019 Dividend to Net Profit (A/B) N/A N/AA - Dividend - -B - Net profit - -II - ASSET QUALITY10 Baking reserves to total loans (A/B) N/A N/AA - Banking reserves - -B - Total loans (gross) 5,339,328 3,547,655XI

TOMATO SPECIALIZED BANK(formerly known as Best Specialized bank)COMPUTATION OF OTHER RATIOSFINANCIAL SOUNDNESS INDICATORSAS AT 31 DECEMBER 2010UNAUDITED31-Dec-10 31-Dec-09USD or % USD or %11 Banking reserves to total assets (A/B) N/A N/AA - Banking reserves - -B - Total assets 8,406,779 5,249,45812 NPL to total loans (A/B) 0.13% N/AA - Non-performing loans 7,010 -B - Total loans (gross) 5,339,328 3,547,65513 NPL to total assets (A/B) 0.08% N/AA - Non-performing loans 7,010 -B - Total assets 8,406,779 5,249,45814 Classified asset to total loan (A/B) 0.13% N/AA - Classified assets 7,010 -B - Total loans (gross) 5,339,328 3,547,65515 Classified assets to total assets (A/B) 0.08% N/AA - Classified assets 7,010 -B - Total assets 8,406,779 5,249,45816 Classified asset to equity (A/B) 0.09% 0.00%A - Classified assets 7,010 -B - Equity 7,944,612 4,792,50117 Loan to related parties to total loans (A/B) 0.34% 0.53%A - Loan to related parties 18,232 18,662B - Total loan (gross) 5,339,328 3,547,65518 Large exposure to total loan (A/B) N/A N/AA - Large exposure - -B - Total loans (gross) 5,339,328 3,547,65519 Loan to related party to net worth (A/B) 0.23% 0.39%A - Loan to related parties 18,232 18,662B - Net worth 8,072,783 4,837,64820 Large exposure to net worth (A/B) N/A N/AA - Large exposure - -B - Net worth 8,072,783 4,837,64821 General provision to total loan (A/B) 0.97% 0.93%A - General provision 51,772 32,904B - Total loans (gross) 5,339,328 3,547,655XII

TOMATO SPECIALIZED BANK(formerly known as Best Specialized bank)COMPUTATION OF OTHER RATIOSFINANCIAL SOUNDNESS INDICATORSAS AT 31 DECEMBER 2010UNAUDITED31-Dec-10 31-Dec-09USD or % USD or %22 Specific provision to total loans (A/B) 0.11% 0.22%A - Specific provision 6,055 7,717B - Total loans (gross) 5,339,328 3,547,65523 Specific provision to NPL (A/B) 86.38% N/AA - Specific provision 6,055 7,717B - NPLs 7,010 -24 All allowances to total assets (A/B) 0.69% 0.77%A - Total all allowances 57,827 40,621B - Total assets 8,406,779 5,249,45825 Loans to deposits (A/B) 25583% 29218%A - Total loans to non-bank customers (gross) 5,339,328 3,547,655B - Customer's deposits 20,871 12,142EARNINGS26 ROA (A/B) 1.81% N/AA - Net profit 152,111 -B - Total assets 8,406,779 5,249,45827 ROE (A/B) 1.92% N/AA - Net profit 152,111 -B - Equity 7,944,612 4,792,50128 Gross yield (A/B) 9.11% 10.83%A - Interest income 765,621 568,646B - Total assets 8,406,779 5,249,45829 Net Interest margin (NIM) to Total asset [(A-B)/C] 9.09% 10.83%A - Interest income 765,621 568,646B - Interest expense 1,347 -C - Total assets 8,406,779 5,249,45830 Other Income (OTINC) = (A/B) 0.48% 2.06%A - Other income 40,385 107,888B - Total assets 8,406,779 5,249,45831 Provision to total asset (A/B) 0.69% 0.77%A - Provision 57,827 40,621B - Total assets 8,406,779 5,249,458XIII

TOMATO SPECIALIZED BANK(formerly known as Best Specialized bank)COMPUTATION OF OTHER RATIOSFINANCIAL SOUNDNESS INDICATORSAS AT 31 DECEMBER 2010UNAUDITED31-Dec-10 31-Dec-09USD or % USD or %32 Overhead (OHEAD) = (A/B) 6.89% 11.02%A - Non-interest expense 579,386 578,636B - Total assets 8,406,779 5,249,45833 Net Income Before Tax (NIBT) = (A/B) 2.47% 1.46%A - Net income/(loss) before tax 208,067 76,711B - Total assets 8,406,779 5,249,45834 Tax to total assets (A/B) 1.01% 0.45%A - Tax (all categories) 84,880 23,407B - Total assets 8,406,779 5,249,45835 Interest margin to gross income [(A-B)/C] 94.98% 84.05%A - Interest income 765,621 568,646B - Interest expense 1,347 -C - Gross income 804,659 676,53436 Non-Interest Income to Gross Income (A/B) 5.02% 15.95%A - Non-interest income 40,385 107,888B - Gross income 804,659 676,53437 Non-Interest Expense to Gross Income (A/B) 72.00% 85.53%A - Non-interest expense 579,386 578,636B - Gross income 804,659 676,53438 Times interest earned [(A+B)/C] 15547% N/AA - Income before tax 208,067 76,711B - Interest expense 1,347 -C - Interest expense 1,347 -LIQUIDITY39 Liquid asset (A/B) 25.45% 16.56%A - Liquid asset 2,139,485 869,548B - Total assets 8,406,779 5,249,45840 Short-term liabilities (A/B) 0.74% 1.09%A - Short-term liabilities (less than one year) 61,933 56,957B - Total assets 8,406,779 5,249,45841 Net liquid asset [(A-B)/C] 449.52% 177.83%A - Liquid assets 2,139,485 869,548B - Short-term liabilities 61,933 56,957C - Total liabilities 462,167 456,957XIV

TOMATO SPECIALIZED BANK(formerly known as Best Specialized bank)COMPUTATION OF OTHER RATIOSFINANCIAL SOUNDNESS INDICATORSAS AT 31 DECEMBER 2010UNAUDITED31-Dec-10 31-Dec-09USD or % USD or %42 Quick ratio (A/B) 3455% 1527%A - Quick assets 2,139,485 869,548B - Current liabilities 61,933 56,95743 Deposits to total loans (A/B) 0.39% 0.34%A - Total customers' deposits 20,871 12,142B - Total loans to non-bank customers (gross) 5,339,328 3,547,65544 Property and equipment to net worth (A/B) 3.06% 4.46%A. Property and equipment 247,105 215,768B. Net worth 8,072,783 4,837,648XV