Annual report 2008-OK-B-up.qxp - Canadia Bank Plc.

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NOTES TO THE FINANCIAL STATEMENTS 32. FINANCIAL RISK MANAGEMENT (CONTINUED) 32.4 Fair value of financial assets and liabilities a) Financial instruments measured at fair value The Bank did not have financial instruments measured at fair value. b) Financial instruments not measured at fair value The table below summarises the carrying amounts and fair value of those financial assets and liabilities not presented on the Bank's balance sheet at their fair value. Carrying value Fair value US$ US$ US$ US$ 2008 2007 2008 2007 Financial assets Balances with other banks 28,785,020 80,725,776 28,785,020 80,725,776 Loans and advances to customers 390,602,198 332,403,990 390,602,198 332,403,990 Other assets 2,595,645 2,646,432 2,595,645 2,646,432 Financial liabilities Deposits from banks 25,777,981 6,739,404 25,777,981 6,739,404 Due to customers 436,362,009 451,570,063 436,362,009 451,570,063 Borrowings 7,057,279 4,379,241 7,057,279 4,379,241 Subordinated debt 7,080,000 7,080,000 7,080,000 7,080,000 Off balance sheet financial instruments: Unused portion of approved credit facilities 28,459,913 39,748,989 Guarantees, acceptances and other financial facilities 4,613,410 11,081,079 i. Balances with other banks Balances with other banks include current accounts which are non-interest bearing, saving deposits and short-term deposits. The fair value of balances with other banks approximates the carrying amount. ii. Loans and advances to customers Loans and advances are net of provision for loan losses. The provision of loan losses is made under the requirements of Central Bank's Prakas. iii. Due to customers and deposits from banks The fair value of due to customers and deposits from banks approximates the carrying amount. The estimated fair value of deposits with no stated maturities, which includes non-interest bearing deposits, is the amount repayable on demand. The fixed interest bearing deposits are not quoted in active market and are short-term. Their fair value approximates the carrying amount. Annual Report 2008 69
NOTES TO THE FINANCIAL STATEMENTS 32. FINANCIAL RISK MANAGEMENT (CONTINUED) 32.4 Fair value of financial assets and liabilities (continued) b) Financial instruments not measured at fair value (continued) iv. Borrowings The borrowings are not quoted in active market. Their fair value approximates the carrying amount. v. Subordinated debt The estimated fair value of subordinated debt with no stated maturities is the amount repayable on demand. 32.5 Capital management The Bank's objectives when managing capital, which is a broader concept than the 'equity' on the face of balance sheet, are: • To comply with the capital requirement set by the Central Bank; To safeguard the Bank's ability to continue as a going concern so that it can continue to provide return for shareholder and benefits for other stakeholders; and To maintain a strong capital base to support the development of business. • The Central Bank requires all commercial banks to i) hold minimum capital requirement, ii) maintain the Bank's net worth at least equal to minimum capital and iii) comply with solvency, liquidity and other prudential ratios The table below summarises the composition of regulatory capital: 31 December 2008 31 December 2007 US$ Riel Million US$ Riel Million (Unaudited) (Unaudited) Tier I capital Statutory capital 40,545,000 165,464 40,545,000 162,302 Retained earnings 54,705,135 223,251 32,631,485 130,624 Total qualifying Tier 1 capital 95,250,135 388,715 73,176,485 292,926 Tier II capital Subordinated debt 7,080,000 28,894 7,080,000 28,341 Total qualifying Tier 2 capital 7,080,000 28,894 7,080,000 28,341 Less: Investment in another bank (10,580,000) (43,177) (10,580,000) (42,352) Intangible assets (1,130,351) (4,613) (1,172,275) (4,693) Loans and advances to related parties (180,805) (737) (235,264) (942) Total regulatory capital (net worth) 90,438,979 369,082 68,268,946 273,280 Subordinated debt is treated as financial liabilities for financial reporting purposes and included as a Tier II line item in the calculation of the Bank's net worth in accordance with the guidelines of the Central Bank. 33. COMPARATIVE FIGURES Certain comparative figures have been reclassified to conform with the current year's presentation of the financial statements. 70 Annual Report 2008
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Annual Report 2008 64
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PRESIDENT’S AND CEO'S REPORT Dist
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FIVE YEARS FINANCIAL REVIEW Total a
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RISK MANAGEMENT Being fully aware o
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Annual report 2008-OK-B-up.qxp - Canadia Bank Plc.

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