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

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.
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Annual Report 2008