Kingdom of Cambodia

Nation – Religion – King

The National Bank of Cambodia

00-47/PrK

PRAKAS on

The Calculation of Bank Net Worth

The Governor of the National Bank of Cambodia

- With reference to the Constitution of the Kingdom of Cambodia;

- With reference to the Kram NS/RKM/0196/27 of January 26, 1996 promulgating the Low on the Organization and Function of the National Bank of Cambodia;

- With reference to the Kram NS/RKN/1199/13 of November 18, 1999 promulgating the Low on the Banking and Financial Institutions;

- With reference to the Kret CS/RKT/0398/85 of March 10; 1998 on the appointment of His Excellency Chea Chanto as Governor General of the National Bank of Cambodia;

Pursuant to the request to the Banking Supervision Department

Decides as follows

Article 1:

Banks' net worth shall be calculated as follows:

I- Sub-total A: Items to be added

- Capital or endowment

- Reserves, other than revaluation reserves

- Premiums related to capital (share premiums)

- Provision for general banking risks with the period agreement of the NBC

- Retained earnings

- Audited net profit for the last financial year ⁽¹⁾

- Other items approved by the NBC ⁽²⁾

(1) After deduction of dividend to be of distribution.

(2) For example, profits as recorded on dates other than the end of the annual accounting period. Provide that:

- They are determined after posting to the accounts all the changes relating to the period and allowances to the depreciation, provision and value adjustment accounts:

- They are calculated net of foreseeable taxes and dividends and been verified by the auditors.

II- Sub-total B: Items to be deducted

- For shareholders, directors, mangers and their next of kin

* Unpaid portion of capital

* Advance and loans

* Instruments bearing the signature of the persons concerned

- Holdings of own shares at their book value

- Accumulated losses

- Intangible assets including formation expenses

- Loss determined on dates other than the end of the annual accounting period (including provision to be made for doubtful debts and securities).

III- Total C: BASE NET WORTH = A-B

IV- Sub-total D: Items to be added

- Revaluation reserves, with the prior agreement of NBC

- Subordinated debt, with the prior agreement of NBC

- Other items, with prior agreement of NBC ⁽¹⁾

V- Sub-total E: Item to be deducted

- Equity participation in banking or financial institutions

- Other items ⁽²⁾

VI- Total F: Total Net Worth = C+D-E

(1) The following may in particular appear these items:

* Fully modularized guarantee funds:

* Public funds allocation for guaranteeing types of credit operations:

* No repayable public or private subsidies.

(3) Deferred charges, for example.

Article 2:

The net worth as calculated above shall be taken into account for the calculation of prudential ratios pertaining to solvency, division, and foreign exchange exposure.

Article 3:

All provisions, which are contrary to those of this Prakas, are hereby repealed.

Article 4:

The General Direction, the General Secretariat, the General Inspection, the General Cashier all Department of the National Bank of Cambodia, and all Banking and Financial Institution under the NBC's supervisory authority shall strictly this Prakas.

Article 5:

This Prakas shall have effect from the signing date.

Phnom Penh, February 16, 2000

The Governor: Chea Chanto