ey - maybank.com · in preparing the financial statements, the branch manager is responsible for...

EY Ernst & Young Lao Co., Ltd. Tel: +856 21 455 077 6th Floor, Kolao Tower I Fax: +856 21 455 078 23 Slngha Road, Nongbone Village ey.com Saysettha District,

Building a better Vientiane Capital, Lao PDR working world

Reference: 61317474/19754743

INDEPENDENT AUDITORS' REPORT

To: The Owner of Malayan Banking Berhad Nongduang Branch

Opinion

We have audited the financial statements of Malayan Banking Berhad Nongduang Branch ("the Branch"), which comprise the balance sheet as at 31 December 2017 and the income statement, statement of changes in equity and cash flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements are prepared, in all material respects, in accordance with the Accounting Law of Lao P.D.R and the regulations stipulated by the Bank of Lao PDR relevant to preparation and presentation of financial statements.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Branch in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Lao P.DR, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to Note 2 of the financial statements, which describes the accounting policies adopted by the Branch. These accounting policies are not intended to present the financial position, the results of operations and cash flows of the Branch in accordance with international generally accepted accounting principles. Our opinion is not modified in respect of this matter.

Other Matters

We draw attention to Note 2.2 to the financial statements on the basis of preparation, which describes the purpose of presenting reference figures in USD in addition to LAK'OOO. The equivalent amounts in USD are presented in the accompanying financial statements for the purpose of the Branch's internal use only and should not be used for any other purpose.

Responsibilities of the Branch Manager for the Financial Statements

The Branch Manager is responsible for the preparation of the financial statements in accordance with the Accounting Law of the Lao P.D.R and with the regulations stipulated by the Bank of Lao PD.R relevant to preparation and presentation of financial statements, and for such internal control as the Branch Manager determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Branch Manager is responsible for assessing the Branch's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Branch Manager either intends to liquidate the Branch or to cease operations, or has no realistic alternative but to do so.

Amember firm of Ernst & Young Global Limited

EY Building a better working world

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Branch's internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Branch Manager.

Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Branch's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Branch to cease to continue as a going concern.

We communicate with the Branch Manager regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Vientiane Capital, Lao P.D.R

9 March 2018

A member firm of Emst & Young Global Limited

Malayan Banking Berhad Nongduang Branch

INCOME STATEMENT for the year ended 31 December 2017

Code ITEMS Notes 2017

LAK'OOO

For the period from 7/3/2016 to 31/1212016

LAK'OOO 2017

usa equiv.

For the period from 7/3/2016 to 3111212016

usa equiv.

A.

1.

OPERATING INCOME AND EXPENSES

Interest and similar

1.1 income Interest and similar income

3 5,360,725 1,071,715 646,962 131,065

1.2 from interbank transactions Interest and similar income

848,364 291,883 102,385 35,696

2.

from loans to customers

Interest and similar

4,512,361 779,832 544,577 95,369

2.1 expenses Interest and similar expenses for customer

3 (213,033) (207,466) (25,710) (25,372)

I.

deposits

NET INTEREST AND

(213,033) (207,466) (25,710) (25,372)

3

SIMILAR INCOME

Fees and commission

5,147,692 864,249 621,252 105,693

4

income

Fees and commission

4 186,020 369,369 22,450 45,172

5

expenses

Net loss from dealing in

4 (10,745) (1,020) (1,297) (125)

II.

foreign currencies

NET OPERATING

5 (107,095) (40,496) (12,925) (4,952)

INCOME 5,215,872 1,192,102 629,480 145,788

5


INCOME STATEMENT (continued) for the year ended 31 December 2017

Code ITEMS Notes 2017

LAK'OOO

For the period from 7/3/2016 to 31/12/2016

LAK'OOO 2017

USD equiv.


USD equiv.

OTHER INCOME AND B EXPENSES

6 Other operating income 744,924 4,403 89,901 537

7 Administration expenses (1,886,738) (1,228,908) (227,702) (150,288) Payroll and other staff

7.1 costs Other administration

6 (819,928) (503,008) (98,953) (61,515)

7.2 expenses

Depreciation and

7 (1,066,810) (725,900) (128,749) (88,773)

8 amortization charges

Other operating

13 (1,982,225) (1,556,189) (239,226) (190,313)

9 expenses 8 (804,959) (206,546) (97,146) (25,259)

TOTAL PROFITI (LOSS) III. BEFORE TAX 1,286,874 (1,795,138) 155,307 (219,535)

18 Current profit tax 18 - - - -

PROFIT/(LOSS) AFTER IV. TAX 1,286,874 (1,795,138) 155,307 (219,535)

Prepared by: Approved by:

Lim Wai Hoong Niphaphone Pholsyna Financial Officer General Manager


9 March 2018

6


BALANCE SHEET as at 31 December 2017

Code ASSETS Notes 31/12/2017

LAK'OOO 31/12/2016

LAK'OOO 31/12/2017 USD equiv.

31/12/2016 USDequiv.

I Cash and balances with the Bank of Lao P.D.R ("the BOL") 56,597,173 75,476,116 6,830,458 9,230,294

1 Cash on hand 9 3,543,478 3,532,281 427,646 431,978 2 Balances with the BOL 10 53,053,695 71,943,835 6,402,812 8,798,316

II Due from other banks 11 8,000,000 16,000,000 965,484 1,956,708 1 Term deposits 8,000,000 16,000,000 965,484 1,956,708

III Loans and advances to customers, net of provision for non-performing loans 12 50,946,595 41,154,017 6,148,515 5,032,899

IV Fixed assets 5,668,501 7,345,212 684,106 898,277 1 Tangible fixed assets 13.1 5,506,901 6,209,493 664,603 759,385 2 Intangible assets 13.2 161,600 1,135,719 19,503 138,892

V Other assets 850,235 1,196,318 102,611 146,303 1 Accrued interest

receivables 475,479 572,460 57,383 70,009 2 Other assets 14 374,756 623,858 45,228 76,294

TOTAL ASSETS 122,062,504 141,171,663 14,731,174 17,264,481

Code LIABILITIES AND CAPITAL Notes

31/12/2017 LAK'OOO

31/12/2016 LAK'OOO

31112/2017 USD equiv.

31/12/2016 USD equiv.

I Due to other banks 15 10,552,398 32,131,808 1,273,521 3,929,535 1 Demand deposits 10,552,398 32,131,808 1,273,521 3,929,535

II Due to customers 16 11,048,933 10,130,899 1,333,446 1,238,951 1 Demand deposits 2,855,615 590,367 344,631 72,199 2 Saving deposits 5,652,494 684,855 682,174 83,754 3 Term deposits 2,540,824 8,855,677 306,641 1,082,998

III Other liabilities 592,975 376,595 71,564 46,055 1 Accrued interest payabies 48,066 93,718 5,801 11,461 2 Tax payabies 181 51,605 55,744 6,228 6,817 3 Other payables 17 493,304 227,133 59,535 27,777

TOTAL LIABILITIES 22,194,306 42,639,302 2,678,531 5,214,541

IV Capital and reserves 1 Paid-up capital 19 100,121,729 100,121,729 12,083,240 12,244,311 2 General provision for credit

activities 12.2 254,733 205,770 30,743 25,164 3 Accumulated losses (508,264) (1,795,138) (61,340) (219,535)

TOTAL CAPITAL 99,868,198 98,532,361 12,052,643 12,049,940

TOTAL L1ABILITES AND CAPITAL 122,062,504 141,171,663 14,731,174 17,264,481

7


BALANCE SHEET (continued) as at 31 December 2017

Code OFF-BALANCE SHEET ITEMS 31/12/2017

LAK'OOO 31/12/2016

LAK'OOO 31/12/2017 usa equiv.

31/12/2016 usa equiv.

I

1

Commitments given

Commitments for financing given to customers 1,657,200 - 200,000 -

TOTAL COMMITMENTS GIVEN 1,657,200 . 200,000 -

II

A

1

B

1

Collaterals and Mortgages

Collaterals and Mortgages for loans Collaterals and Mortgages for loans to customers

Collaterals and Mortgages for guarantees Collaterals and Mortgages for guarantees given to customers

107,686,881

107,686,881

1,657,200

1,657,200

74,445,285

74,445,285

-

-

12,996,244

12,996,244

200,000

200,000

9,104,230

9,104,230

-

-

COLLATERALS AND MORTGAGES 109,344,081 74,445,285 13,196,244 9,104,230

Prepared by:

Niphaphone Pholsyna Lim Wai Hoong Financial Officer General Manager

Vientiane, Lao P.D.R

9 March 2018

8


STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2017

ITEMS Paid-up capital

LAK'OOO

General provision for credit activities

LAK'OOO Accumulated losses

LAK'OOO Total

LAK'OOO

Balance as at 31 December 2016 Net profit for the year General provision charged during the year Reversal of general provision during the year ForeiQn exchange difference

100,121,729 ---

-

205,770 -

766,696 (718,185)

452

(1,795,138) 1,286,874

---

98,532,361 1,286,874

766,696 (718,185)

452 Balance as at 31 December 2017 100,121,729 254,733 (508,264) 99,868,198

ITEMS Paid-up capital

USD equiv.

General provision for credit activities

USD equiv. Accumulated losses

USD equiv. Total

USD equiv.

Balance as at 31 December 2016 Net profit for the year General provision charged during the year Reversal of general provision during the year Foreign exchange difference

12,244,311 -

--

(161,071)

25,164 -

92,529 (86,675)

(275)

(219,535) 155,307

--

2,888

12,049,940 155,307 92,529

(86,675) (158,458)

Balance as at 31 December 2017 12,083,240 30,743 (61,340) 12,052,643

~ r Niphaphone Pholsyna Lim Wai Hoong Financial Officer General Manager


9 March 2018

9


CASH FLOW STATEMENT for the year ended 31 December 2017

ITEMS Notes 2017

LAK'OOO


LAK'OOO 2017

USO equiv.


USO equiv.

Net gain/(Ioss) before tax 1,286,874 (1,795,138) 155,307 (219,535)

Adjustments for: Depreciation and amortization charges 1,982,225 1,556,189 239,226 190,313 General provision expenses Reversal of provision for credit

12.2 766,696 205,770 92,529 25,164

losses of loans to customers 12.2 (718,185) - (86,675) -

Cash flows from operations before changes in operating assets and liabilities 3,317,610 (33,179) 400,387 (4,058)

(Increase)/Decrease in operating assets

Due from other banks 30,836,003 (64,512,814) 3,721,458 (7,889,546) Loans and advances to customers (9,792,578) (41,154,017) (1,181,822) (5,032,899) Accrued interest receivables 96,982 (572,461) 11,704 (70,009) Other assets 249,553 (623,857) 30,063 (76,294)

Increase/(Decrease) in operating liabilities

Due to other banks (21,579,410) 32,131,808 (2,604,322) 3,929,535 Customer deposits and other amounts due to customers 918,033 10,130,899 114,500 1,238,951

Accrued interest payabies (45,654) 93,718 (5,510) 11,461

Other liabilities 216,574 282,877 22,430 34,595

Net cash flows from/(used in) operating activities 4,217,113 (64,257,026) 508,888 (7,858,264)

INVESTING ACTIVITIES Payments to acquire properties and equipment (260,053) (8,901,401 ) (31,385) (1,088,590)

Net cash flows used in investing activities (260,053) (8,901,401 ) (31,385) (1,088,590)

FINANCING ACTIVITIES Capital contribution 19 - 100,121,729 - 12,244,311

Net cash flows from financing activities . 100,121,729 . 12,244,311

Net change in cash and cash equivalents 3,957,060 26,963,302 477,503 3,297,457

t

,l

10


CASH FLOW STATEMENT (continued) for the year ended 31 December 2017

ITEMS Notes 2017

LAK'OOO


LAK'OOO 2017

usa equiv.


usa equiv.

Cash and cash equivalents at the beginning of the period

Effect of foreign exchange difference

Cash and cash equivalents at the end of the period 20

26,963,302

-

30,920,362

-

-

26,963,302

3,297,457

(43,321)

3,731,639

-

-

3,297,457

Prepared by: Reviewed by:

Niphaphone Pholsyna Lim Wai Hoong Financial Officer General Manager


9 March 2018

11

ey - maybank.com · in preparing the financial statements, the branch manager is responsible for...

Documents