Annual report 2009-OK.qxp - Canadia Bank Plc.

Canadia Bank Plc.16. BORROWINGS2009 2009 2008 2008US$ Million Riel US$ Million Rielequivalentequivalent(Note 2.1) (Note 2.1)Short-term overdraft with NBC - - 3,105,467 12,674Term borrowing 3,234,615 13,485 3,951,812 16,1273,234,615 13,485 7,057,279 28,801Term borrowing represents loan from KfW through the Ministry of Economy and Finance ("MoEF") that resultedfrom loan and finance agreements between the Bank, KfW and MoEF dated 23 April 2003 for Small and MediumEnterprise ("SME") term-lending I and dated 18 October 2005 for SME term- lending II.The agreements stipulatethat the funds borrowed from KfW through MoEF shall be sub-lent to Small and Medium Enterprises to buildSME capacity in Cambodia. The sub-loans are classified as an asset of the Bank under loans and advances tocustomers. KfW borrowing is unsecured and bears annual interest at an average rate of 6.98% (2008: 5.81%).17. SUBORDINATED DEBTOn 28 October 2005, the Bank entered into an agreement with Mr Pung Kheav Se, a main shareholder of theBank through CIHP, to provide the Bank with a subordinated loan of US$7.08 million for the purpose ofacquiring shares in FTB. This subordinated debt is unsecured, non-interest bearing and has no fixed terms ofrepayment. This subordinated debt was approved by the NBC on 28 December 2005.The subordinated debt is treated as a liability for financial reporting purposes and included as capital Tier II inthe Bank's net worth calculation in accordance with the guidelines of the NBC (see Note 33).51Annual Report 200918. PROVISION FOR STAFF GRATITUDE2009 2009 2008 2008US$ Million Riel US$ Million Rielequivalentequivalent(Note 2.1) (Note 2.1)Provision for staff benefits 1,095,550 4,567 810,350 3,307The Bank has provided its employees with retirement and resignation benefit plan since August 2006. Movementsin the provision for staff benefits are as follows:2009 2009 2008 2008US$ Million Riel US$ Million Rielequivalentequivalent(Note 2.1) (Note 2.1)At beginning of year 810,350 3,378 - -Provision 356,938 1,488 837,790 3,419Payments (71,738) (299) (27,440) (112)At end of year 1,095,550 4,567 810,350 3,307